What Are Trading Assets?

Trading financial assets (debt securities) refer to debt securities and equity securities that an enterprise intends to obtain profit through active management and trading. Companies often buy and sell such securities frequently in order to make a profit from short-term price changes. ^[1]

Transactional financial assets

Financial assets that meet one of the following conditions should be classified as transactional financial assets:

1. The purpose of holding the enterprise is short-term, that is, at the time of initial confirmation, it is determined that the purpose of holding is for short-term profit. Generally, the short term here should not exceed one year (including one year);

2. The

Investments (accounted for as trading financial assets),

Definition of transactional financial assets:

According to the financial instrument recognition and measurement accounting standards, financial assets or

1. "Transaction financial assets" account holders held by the accounting company for trading purposes

I. Financial assets held by accounting enterprises at fair value and whose changes are included in current profit and loss, including those held for trading purposes

The difference between long-term equity investment and financial assets is mainly:

The holding period is different, and the long-term equity investment focuses on the long-term;

For different purposes, long-term equity investments focus on controlling or

On February 21, 2007, Company A purchased a batch of bonds for management and accounting as a transactional financial asset. The purchase price was 235 000 yuan, including 5,000 yuan of bonds that had matured but had not yet been received. The tax is 4,200 yuan, which is paid by bank deposit. The market price of the bond on February 28, 2007 was 237,000 yuan. Received 5,000 yuan interest on March 21, 2007. On April 5, 2007, Company A sold the bond. After deducting related taxes, it actually received 237,800 yuan and deposited it in the bank.

The accounting entries are as follows:

February 21

Borrow: Transactional financial assets-cost 230 000

Investment income 4 200

Interest receivable 5 000

Loan: bank deposit 239 200

Fair value increase at the end of February 28: 237 000-230 000 = 7000

Borrowings: Transactional financial assets-change in fair value 7 000

Loan: Gain or loss on changes in fair value 7 000

March 21

Borrow: bank deposit 5 000

Loan: Interest receivable 5 000

April 5

Paid amount = 237 800

Book value = 230 000 + 7 000 = 237 000

The actual payment is higher than the book value = 237 800-237 000 = 800

Borrow: bank deposit 237 800

Loans: Transactional financial assets-cost 230 000

Fair value change 7 000

Investment income 800

Simultaneously:

Borrow: Gain or loss on changes in fair value 7 000

Loan: Investment income of 7 000

4. The debit balance at the end of the course reflects the fair value of corporate financial assets

Characteristics of transactional financial assets

The purpose of corporate holding is to make short-term profits. Generally, the short term here should not exceed one year (including one year);

The fair value of the asset can be reliably measured.