The classification of a financial instrument on the statement of financial position of an entity is governed by the principle of:
A)fair value.
B)legal form.
C)net present value.
D)substance over form.

Question

Quizplus · Accepted Answer

The classification of a financial instrument is based on the principle of "substance over form," which means that the economic reality and underlying substance of the transaction take precedence over its legal form.

The Classification of a Financial Instrument on the Statement of Financial