Financial instrument:

A financial instrument is a tradable asset of any kind, either cash; evidence of an

ownership interest in an entity; or a contractual right to receive, or deliver, cash or
another financial instrument.
According to IAS 32 and 39, it is defined as 'any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of another entity'.
Categorization:

Cash instruments are financial instruments whose value is determined directly

by markets. They can be divided into securities, which are readily transferable, and
other cash instruments such as loans and deposits, where both borrower and lender
have to agree on a transfer.

Derivative instruments are financial instruments which derive their value from
the value and characteristics of one or more underlying entity such as an Asset an
Index or an Interest Rate. They can be divided into exchange-traded
derivatives and over-the-counter (OTC) derivatives.

Alternatively, financial instruments can be categorized by "asset class" depending on

whether they are equity based (reflecting ownership of the issuing entity) or debt based
(reflecting a loan the investor has made to the issuing entity). If it is debt, it can be
further categorised into short term(less than one year) or long term.
Foreign Exchange instruments and transactions are neither debt nor equity based
and belong in their own category.

Equity:
In accounting and finance, equity is the residual claim or interest of the most junior class
of investors in assets, after all liabilities are paid. If liability exceeds assets, negative
equity exists. In an accounting context, Shareholders' equity (or stockholders' equity,
shareholders' funds, shareholders' capital or similar terms) represents the remaining
interest in assets of a company, spread among
individual shareholders of common or preferred stock.
At the start of a business, owners put some funding into the business to
finance operations. This creates a liability on the business in the shape of capital as the

business is a separate entity from its owners. Businesses can be considered to be,
foraccounting purposes, sums of liabilities and assets; this is the accounting equation.
After liabilities have been accounted for, the positive remainder is deemed the owner's
interest in the business.
This definition is helpful in understanding the liquidation process in case of bankruptcy.
At first, all the secured creditors are paid against proceeds from assets. Afterward, a
series of creditors, ranked in priority sequence, have the next claim/right on the residual
proceeds. Ownership equity is the last or residual claim against assets, paid only after all
other creditors are paid. In such cases where even creditors could not get enough money
to pay their bills, nothing is left over to reimburse owners' equity. Thus owners' equity is
reduced to zero. Ownership equity is also known as risk capital or liable capital.

Bond:
In finance, a bond is a debt security, in which the authorized issuer owes the holders a
debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) to
use and/or to repay the principal at a later date, termed maturity. A bond is a formal
contract to repay borrowed money with interest at fixed intervals. [1]
Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender
(creditor), and the coupon is the interest. Bonds provide the borrower with external funds
to finance long-term investments, or, in the case of government bonds, to finance current
expenditure. Certificates of deposit (CDs) or commercial paper are considered to
be money market instruments and not bonds.
Bonds and stocks are both securities, but the major difference between the two is that
(capital) stockholders have an equity stake in the company (i.e., they are owners),
whereas bondholders have a creditor stake in the company (i.e., they are lenders).
Another difference is that bonds usually have a defined term, or maturity, after which the
bond is redeemed, whereas stocks may be outstanding indefinitely. An exception is
a consol bond, which is a perpetuity (i.e., bond with no maturity).

Deposits:
A deposit account is a current account, savings account, or other type of bank
account, at a banking institution that allows money to be deposited and withdrawn by
the account holder. These transactions are recorded on the bank's books, and the

resulting balance is recorded as a liability for the bank, and represent the amount owed
by the bank to the customer. Some banks charge a fee for this service, while others may
pay the customer interest on the funds deposited.
Major Types:

Checking accounts: A deposit account held at a bank or other financial institution,

for the purpose of securely and quickly providing frequent access to funds on
demand, through a variety of different channels. Because money is available on
demand these accounts are also referred to as demand accounts or demand deposit
accounts.

Savings accounts: Accounts maintained by retail banks that pay interest but can
not be used directly as money (for example, by writing a cheque). Although not as
convenient to use as checking accounts, these accounts let customers keep liquid
assets while still earning a monetary return.

Money market account: A deposit account with a relatively high rate of interest,
and short notice (or no notice) required for withdrawals. In the United States, it is a
style of instant access deposit subject to federal savings account regulations, such as
a monthly transaction limit.

Time deposit: A money deposit at a banking institution that cannot be withdrawn

for a preset fixed 'term' or period of time. When the term is over it can be withdrawn
or it can be rolled over for another term. Generally speaking, the longer the term the
better the yield on the money.

Cash and cash equivalents:

Cash and cash equivalents are the most liquid assets found within the asset portion of
a company's balance sheet. Cash equivalents are assets that are readily convertible
into cash, such as money market holdings, short-term government bonds or Treasury
bills, marketable securities andcommercial paper. Cash equivalents are distinguished
from other investments through their short-term existence; they mature within 3 months
whereas short-term investments are 12 months or less, and long-term investments are
any investments that mature in excess of 12 months. Another important condition a cash
equivalent needs to satisfy is that the investment should have insignificant risk of change
in value; thus, common stock cannot be considered a cash equivalent, but preferred
stock acquired shortly before its redemption date can be.
Payments:-

"Cash and cash equivalents", when used in the contexts of payments and payments
transactions refer to currency, coins, money orders, paper checks, and stored value
products such as gift certificates and gift cards.
If in adjustment of cash flow it is written that investment is short term you should not
consider that investment as a part of cash and cash equivalent,
Real Estate:
Real estate is a legal term (in some jurisdictions, such as the United
Kingdom, Canada, Australia, USA, Dubai, Trinidad and Tobago and The Bahamas) that
encompasses land along with improvements to the land, such as buildings, fences, wells
and other site improvements that are fixed in locationimmovable. [1] Real estate law is
the body of regulations and legal codes which pertain to such matters under a
particular jurisdiction and include things such as commercial and residential real property
transactions. Real estate is often considered synonymous with real
property (sometimes called realty), in contrast with personal property (sometimes
called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land
and fixtures together, as distinguished from "real property", referring to ownership of
land and appurtenances, including anything of a permanent nature such as structures,
trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is
typically considered to be immovable property.[2] The terms real estate and real
property are used primarily in common law, while civil law jurisdictions refer instead
to immovable property.

Gold Standards:
The gold standard is a monetary system in which the standard economic unit of
account is a fixed mass of gold. There are distinct kinds of gold standard. First, the gold
specie standard is a system in which the monetary unit is associated with circulating gold
coins, or with the unit of value defined in terms of one particular circulating gold coin in
conjunction with subsidiary coinage made from a lesser valuable metal.
Similarly, the gold exchange standard typically involves the circulation of only coins
made of silver or other metals, but where the authorities guarantee a fixed exchange
rate with another country that is on the gold standard. This creates a de facto gold

standard, in that the value of the silver coins has a fixed external value in terms of gold
that is independent of the inherent silver value. Finally, the gold bullion standard is a
system in which gold coins do not circulate, but in which the authorities have agreed to
sell gold bullion on demand at a fixed price in exchange for the circulating currency.