capital instruments

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The means used by companies to raise finance, including shares, debentures, and loans; it also includes options and warrants that give the holder the right to subscribe for or to obtain capital instruments. In company accounts it is essential to distinguish between capital instruments and equity; the regulations in Financial Reporting Standard (FRS) 4, Capital Instruments, have now been superseded by those in FRS 25, Financial Instruments: Disclosure and Presentation, which closely follow International Accounting Standard 32.

Subjects: Accounting.

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