Sec. 1. Scope. This Chapter provides principles for: a) presenting financial instruments as liabilities or net assets/equity and for offsetting financial assets and financial liabilities; b) recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items; and c) disclosure in the entity's financial statements that enable users to evaluate the significance of financial instruments for the entity's financial position and performance and the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the end of the reporting period, and how the entity manages those risk.
Sec. 2. Definition of Terms. For the purpose of this Manual, the terms stated below shall be construed to mean as follows:
a. Equity instrument - is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
e. Financial liability - is any liability that is:
i. To deliver cash or another financial asset to another entity; or
Sec. 3. Financial Instruments. The following are the characteristics of a financial instrument:
a. There must be a contract;