de Leon, Earl Geraldson D.

INTERM1
BFAC02 Sept 16, 2020

Module 2: Reading Task

1. Do you agree that money market instruments can be considered under current asset?
Non-current asset? Justify your answers.

- From an Accountancy student’s perspective, it would be wise decision if we could

use money market instruments as a type of current asset. As it is highly liquefiable to
cash, it can be used as an alternative form of currency or another cash equivalent.
This will allow for more ways to acquire assets or to be compensated for a product
or service. There is still the risk of it decreasing in value and that would be a
problem, but the governing bodies assure us that the changes in its value is
insignificant enough to be unnoticeable. Furthermore, the IASB staff paper release
in 2010 is thinking of removing cash equivalents as a concept in Accounting
considering that cash and cash equivalents sometimes have different values. Even
so, the usage of cash equivalents especially in current assets would give any
company a better position for them to make better decisions for further business
transactions.