CERTYNEX IFRS ACADEMY

Rostis classifies as a cash equivalent an 18-month savings certificate acquired 16 months ago, on the ground that it matures in 2 months. What is the error?

There is no error, the remaining maturity being under three months.

The short maturity is assessed from the acquisition date, not at the reporting date.

A savings certificate is never a liquid investment, whatever its original term.

The certificate should have been classified as cash, not as an equivalent.