A financial asset is a fund that reflects financial liabilities and claims. At the same time, such funds allow the holder to have the right to receive one or several payments from some other institutional unit. The latter in this case acts as a debtor on the basis of an agreement that was previously fixed between them. Thus, a financial asset is a specific form of property relations. Nevertheless, it provides the owner with an opportunity to make a profit. This concept characterizes all available financial resources at the disposal of the enterprise .
Components
Like any other accounting article , the financial asset of an enterprise is a fairly complex structure, which consists of many components. Let's list the most significant of them. This concept is traditionally referred to as cash, securities, deposits and deposits, cash in hand, shares and insurance policies. In addition, it should be noted that portfolio investment in shares of the organization in question, as well as packages and investments in other companies, are also referred to this article of accounting documentation. Financial assets should be accounted for by specialists who do not forget that besides all of the above, the following points are also attributed to this economic term: monetary gold, technical reserves, foreign investments, borrowings from the currency fund. In analyzing all the above, we can conclude that all financial transactions related to this category consist of two main groups, which are called "asset for the creditor" and "liability for the debtor."
Profitability of financial assets
Like any other product that can be found in a wide range of the modern market, the sought value has a sufficient number of characteristics and factors responsible for the appropriateness of the various operations associated with it. Nevertheless, there are many distinctive features. The most obvious example is the following: a financial asset is acquired not for direct consumption. The purpose of their occurrence is considered to be investment in any part of the production process. If, as a result of such activities, the asset promoted the multiplying of profits, then it is considered that it was used rationally. In addition, it should be borne in mind that the receipt of income should be regular and directly depend on the amount of the asset invested to receive it.
Risk, profitability and price
These economic indicators are the most important indicators of a financial asset. Risk is the probability that an entrepreneur will incur losses as a result of his activities. Profitability is the interest rate calculated for the year that characterizes the return on invested capital investments. The price, in turn, is an asset valuation in monetary terms.