IAS 32 defines a financial instrument as

Financial instruments are defined by International Accounting Standard (IAS) 32 as “any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity”. This definition encompasses a broad range of instruments, including cash, receivables, payables, deposits, debt securities and equity instruments. Financial instruments provide a mechanism for an entity to receive, hold and exchange resources over time. The standardized IAS 32 requirements are designed to ensure that an entity records the fair value of each financial instrument as measured in the financial statements.