1. What is it?
NIF C-2 is a standard that tells us how to manage and record financial instruments in companies.
2. What is a financial instrument?
It is any type of contract related to money, such as stocks, bonds, and loans.
3. How are they classified?
Financial instruments are divided into two large groups:
to) Financial Assets: These are things you have that can make you money in the future.
- At Fair Value through Profit or Loss: They are valued at their current price, and any change in that price is reflected in profit or loss. Examples: shares purchased to be sold soon.
- At Fair Value with Changes in Shareholders' Equity: They are also valued at their current price, but changes are recorded in a special capital account, not in earnings. Examples: long-term stock investments.
- At Amortized Cost: They are recorded according to their initial cost less payments and adjustments. Examples: loans that the company grants or receives.
- Financial Instruments Receivable or Sold (IFCV): Financial assets are considered at amortized cost if they are expected to be held until realized. Examples: accounts receivable and certain bonds.
- Negotiable Financial Instruments (NFI): They are valued at fair value and any change is reflected in earnings. Examples: shares purchased to sell in the short term.
- b) Financial Liabilities: These are things that you owe and that will make you pay money in the future.
4. Business Model?
The company's business model affects how each financial instrument is classified and valued. Depending on whether the company plans to hold the assets for the long term, sell them in the short term, or simply hold them until they are realized, different valuation and classification methods will be used.
In summary
NIF C-2 establishes how to classify and value financial instruments, considering the purpose and intention of the company with these instruments. This helps make financial reports clear and useful for understanding the company's economic situation.
0 comentarios