- Acquisition cost - is the amount paid in cash or equivalents for an asset or service at the time of its acquisition; Cash - is the legal tender in cash and in bank deposits available for the operation of the entity; such as, the availability in checking accounts, bank drafts, telegraph or postal and remittances in transit; Cash equivalents - these are short-term securities, highly liquid, easily convertible into cash and subject to minor risks of changes in currency. its value; such as: foreign currencies, precious metals in cash and investments available on demand; Cash and cash equivalents, restricted - are cash and cash equivalents that have certain limitations for their availability, which are normally contractual or legal;Investments available on demand - these are securities whose disposal by the entity is anticipated immediately, generate returns and have minor risks of changes in their value; such as, very short-term investments, for example, maturing up to 3 months from the date of acquisition; Net realizable value - is the amount received in cash, cash equivalents or in kind, for the sale or exchange of an asset; Nominal value - is the amount in monetary units expressed in bills, coins, securities and instruments; y Fair value - represents the amount of cash or equivalents that market participants would be willing to exchange for the purchase or sale of an asset, or to assume or settle a liability, in a transaction between willing and informed interested parties,in a market of free competition. When there is no accessible exchange value of the operation, an estimate of it must be made using valuation techniques.
Valuation standards
P5. Cash must be valued at face value.
P6. All cash equivalents on initial recognition must be recognized at acquisition cost.
P7. Cash equivalents represented by precious metal coins must be valued at fair value; For this purpose, its net realizable value must be used as of the closing date of the financial statements. The effects of changes in their value must be recognized in the income statement as they accrue.
P8. Cash equivalents denominated in foreign currencies must be converted or restated to the reporting currency using the exchange rate at which they could have been made on the closing date of the financial statements. The effects of such conversions must be recognized in the income statement as they accrue.
NIF C-1. Cash and cash equivalents
Q9. Cash equivalents denominated in another exchange measure, such as Investment Units (UDI), must be converted or restated at the exchange measure corresponding to the closing date of the financial statements. The effects of changes in its restatement must be recognized in the income statement as they accrue.
Q10. Investments available at sight must be valued at fair value; For this purpose, its net realizable value must be used as of the closing date of the financial statements; the effects of changes in their value must be recognized in income as they accrue. Likewise, the returns generated by said investments must be recognized in income as they accrue.
NIF C-1. Cash and cash equivalents
Q11. In the statement of financial position, cash and cash equivalents should be presented in a single line as the first item of the short-term asset, including restricted cash and cash equivalents, provided that said restriction expires within the following twelve months as of the date of the statement of financial position or during the normal cycle of operations of the entity; the item must be called Cash and Cash Equivalents. If the restriction expires after the previous references, this concept must be presented in the long-term asset and must be called Restricted Cash and cash equivalents.
P12. The amount of the checks issued prior to the date of the financial statements that are pending delivery to the beneficiaries must be reincorporated to the cash item recognizing the corresponding liability.
NIF C-1. Cash and cash equivalents
P13. When there are no compensation agreements with the corresponding financial institution, overdrafts must be shown as a short-term liability, even when other checking accounts with a debit balance are maintained at the same institution.
NIF C-1. Cash and cash equivalents
In the event of having a compensation agreement, in this case with Santander, it is not necessary to make any reclassification, since the net balance with Santander for $ 23,000 is debtor ($ 65,000 - $ 42,000).
Sometimes some entities generate bad checks, which are not delivered to the beneficiaries for this reason, or are issued with a date after their issuance, on the condition that the beneficiaries deposit them until the indicated date, a practice that is called "post-dated check", which was born due to liquidity problems and to give certainty to collectors, in order to avoid hassles in collection efforts; However, we must not forget that checks are payable on demand, so this practice is not correct, in any of the above cases, it is very likely that credit balances in banks will be generated in accounting (balance in red), to which the treatment indicated in the previous paragraph should be given.
Note: It is important to clarify that the entries indicated in these presentation rules are not recorded in the accounting, they are made only in the preparation of the financial statements, they are made at the level of a worksheet, since their purpose is the proper arrangement or presentation of figures in the financial statements.
Presentation rules
Q14. Based on NIF B-3, Income Statement, the following must be presented in comprehensive financing result:
- Interest generated by cash and cash equivalents; Exchange fluctuations of cash equivalents denominated in foreign currency or in some other exchange measure; yAdjustments to fair value of cash equivalents.
Disclosure rules
Q15. Information about the following should be disclosed in the notes to the financial statements:
- The integration of cash and cash equivalents indicating, where appropriate, the valuation policy and the currency or exchange measure of its denomination; In the event that there is restricted cash and cash equivalents, their amount and the reasons for its restriction and the probable date it will expire; The amounts of cash and cash equivalents that are destined for a specific purpose by the administration; The effect of subsequent events that, due to their importance, have substantially modified the valuation of cash in foreign currency, in precious metals in cash and in investments available at sight, between the date of the financial statements and the date they are authorized. for issuance; this based on what is established in NIF B13,Events after the date of the financial statements.
