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Financial Assets, financial liabilities & Equity
Financial Reporting
Sir, in 26th video Illustration 18, at 10.40, how will the premium received against the put options is in the nature of equity. Kindly clarify. Video Details ------------- Financial Instruments - FR Financial Assets, Financial Liabilities & Equity #26. Illustrations 16 - 18
Answers (1)
a contract that will be settled by the entity (receiving or) delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash or another financial asset is an equity instrument. In case of written put options, the entity will receive fixed number of own shares.
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