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A derivative asset can be classified as a current asset if it is expected to be settled or converted into cash within one year or within the operating cycle of the business, whichever is longer. Common examples include options and futures contracts that are held for trading purposes. However, if a derivative asset is intended for long-term investment or hedging, it may be classified as a non-current asset. The classification ultimately depends on the intent and timing of the asset's settlement.
What else can I help you with?
Is gold is fixed asset or current asset?
Current asset
Is cafe a current asset or fixed asset?
Current asset.
Is prepaid insurance a current asset or fixed asset?
Current Asset
Is a security deposit a current asset or current liability?
Current Asset
Is fixtures and fittings a current asset or a non current asset?
non current
Are gold certificates a derivative asset?
Yes.
Is gold is fixed asset or current asset?
Current asset
Is cafe a current asset or fixed asset?
Current asset.
Is prepaid insurance a current asset or fixed asset?
Current Asset
Is money lent by a bank a current asset or non current asset?
non current asset
What is a basic risk when entering into a derivative contract?
Basis Risk. This is the spot (cash) price of the underlying asset being hedged, less the price of the derivative contract used to hedge the asset.
Is a security deposit a current asset or current liability?
Current Asset
Is premises a current asset or non current asset?
non-current assets.
Is fixtures and fittings a current asset or a non current asset?
non current
Is freight a current asset or non current asset?
it is a expense
Is Closing Inventory is it a current asset?
is closing inventory a current or non current asset
How can derivative increase risk?
Since derivatives are typically highly leveraged, they are almost always riskier that the underlying asset. That is, a small change in asset value will typically produce a much larger % change in the value of the derivative.
