Asked by: Parmjit Sabbusiness and finance debt factoring and invoice discounting
Are fixed deposits cash equivalents?
Just so, is fixed deposit cash and cash equivalents?
As per the guidelines FD in a bank is a current assets and it will be shown under cash & cash equivalent. Years of maturity is immaterial for the purpose of recording FD in balance sheet.
In this manner, what are considered cash equivalents?
Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities, which are debt securities with maturities of less than 90 days.
A CD may be a “cash equivalent” if it meets certain criteria. Other investments and securities that are not cash equivalents include postage stamps, IOUs, and notes receivable because these are not readily converted to cash.