{"id":49701,"date":"2022-05-17T15:57:08","date_gmt":"2022-05-17T15:57:08","guid":{"rendered":"https:\/\/ccm-swiss.com\/?p=49701"},"modified":"2023-06-30T10:34:16","modified_gmt":"2023-06-30T10:34:16","slug":"1-cash-and-cash-equivalents-deutsche-telekom","status":"publish","type":"post","link":"https:\/\/ccm-swiss.com\/index.php\/2022\/05\/17\/1-cash-and-cash-equivalents-deutsche-telekom\/","title":{"rendered":"1 Cash and cash equivalents Deutsche Telekom Annual Report 2021"},"content":{"rendered":"<div id=\"toc\" style=\"background: #f9f9f9;border: 1px solid #aaa;display: table;margin-bottom: 1em;padding: 1em;width: 350px;\">\n<p class=\"toctitle\" style=\"font-weight: 700;text-align: center;\">Content<\/p>\n<ul class=\"toc_list\">\n<li><a href=\"#toc-0\">Accounts Receivable<\/a><\/li>\n<li><a href=\"#toc-1\">What Makes a Financial Instrument a Cash Equivalent?<\/a><\/li>\n<li><a href=\"#toc-2\">2 Cash and Cash Equivalents<\/a><\/li>\n<li><a href=\"#toc-3\">Understanding Cash and Cash Equivalents (CCE)<\/a><\/li>\n<li><a href=\"#toc-4\">Cash and Cash Equivalents On the Balance Sheet (Financial Statement)<\/a><\/li>\n<li><a href=\"#toc-5\">Cash and Cash Equivalents Examples<\/a><\/li>\n<li><a href=\"#toc-6\">How to calculate it? \u2013 Excel Examples<\/a><\/li>\n<\/ul>\n<\/div>\n<p><img decoding=\"async\" class='wp-post-image' style='display: block;margin-left:auto;margin-right:auto;' src=\"https:\/\/www.bookstime.com\/wp-content\/uploads\/2020\/04\/shutterstock_1821914234-300x158.jpg\" width=\"259px\" alt=\"cash and cash equivalents\"\/><\/p>\n<p>Depending on the amount of detail needed or desired for a financial report, highly liquid savings accounts or money market fund holdings can be combined with cash into a single item on the balance sheet. Cash and its equivalents are typically reported under current assets on the balance sheet, since they are liquid assets that can easily be converted into cash. Cash equivalents are low-risk, highly liquid investments that can be easily converted into cash.<\/p>\n<div itemScope itemProp=\"mainEntity\" itemType=\"https:\/\/schema.org\/Question\">\n<div itemProp=\"name\">\n<h3>What is cash and cash equivalents in IFRS?<\/h3>\n<\/div>\n<div itemScope itemProp=\"acceptedAnswer\" itemType=\"https:\/\/schema.org\/Answer\">\n<div itemProp=\"text\">\n<p>Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value.<\/p>\n<\/div><\/div>\n<\/div>\n<p>Regulatory agencies may also obligate firms to have specific cash and cash equivalents. Because of the uncertainty regarding client creditworthiness, outstanding account receivable balances are not cash equivalents even if the invoice is due or shortly to be due. Even if a debt is ready for collection, there is no guarantee the client will be able to pay. In  addition, the company may not have preferential positioning in bankruptcy or liquidation proceedings.<\/p>\n<h2 id=\"toc-0\">Accounts Receivable<\/h2>\n<p>She has performed editing and fact-checking work for several leading finance <a href=\"https:\/\/www.bookstime.com\/\">https:\/\/www.bookstime.com\/<\/a> publications, including The Motley Fool and Passport to Wall Street.<\/p>\n<p><img decoding=\"async\" class='aligncenter' style='display: block;margin-left:auto;margin-right:auto;' src=\"https:\/\/www.bookstime.com\/wp-content\/uploads\/2022\/04\/common-cash-flow-scaled-1-300x200.jpg\" width=\"253px\" alt=\"cash and cash equivalents\"\/><\/p>\n<p>Credit collateral is often used as a type of security or guarantee for the repayment of a debt or other financial obligation. Short-term government bonds are bonds issued by national governments, considered one of the safest types of investment because of the government&#8217;s capacity to tax and mint money. Certificates of Deposits (CD\u2019s) are usually recorded as short-term investments.<\/p>\n<h2 id=\"toc-1\">What Makes a Financial Instrument a Cash Equivalent?<\/h2>\n<p>Foreign currency can impact the value of cash and cash equivalents recorded on the balance sheet. Variations in exchange rates may affect the reported value of cash or cash equivalents held by a business denominated in foreign currency. All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents and are combined and reported with Cash. Management determines the appropriate classification of its investments at the time of purchase and reevaluates the designations at each balance sheet date. Companies may elect to classify some types of their marketable securities as cash equivalents. This depends on the liquidity of the investment and what the company intends to do with such products.<\/p>\n<ul>\n<li>Debt instruments, whether issued by a government or corporation, is tied to the health of that entity with no guarantee the entity may survive the term of the cash equivalent.<\/li>\n<li>Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years.<\/li>\n<li>Cash and cash equivalents information is sometimes used by analysts in comparison to a company&#8217;s current liabilities to estimate its ability to pay its bills in the short term.<\/li>\n<li>However, in practice, many companies do not segregate restricted cash but disclose the restrictions through note disclosures.<\/li>\n<\/ul>\n<p>Examples of investments that typically meet these criteria are short-term, highly liquid investments such as commercial paper and Treasury bills. The requirements for classification intend to ensure that only genuinely short-term and low-risk assets are in this category. For example, CVS Health, an American healthcare company, shows $9,408 million as cash and cash equivalents in its balance sheet as of 31st December 2021. Examples of cash equivalents include short-term fixed income investments with a maturity period of three months or less, currency on hand, commercial paper and government bonds. Cash and cash equivalents are stapled entries on every company&#8217;s balance sheet. They represent the firm&#8217;s most liquid assets, with three months or less maturities.<\/p>\n<h2 id=\"toc-2\">2 Cash and Cash Equivalents<\/h2>\n<p>Restricted cash and compensating balances are reported separately from regular cash if the amount is material. In general, cash should not be classified in current assets if there are restrictions that prevent it from being used for current purposes. However, in practice, many companies do not segregate restricted cash but disclose the restrictions through note disclosures. Typically, the combined amount of <a href=\"https:\/\/www.bookstime.com\/articles\/cash-and-cash-equivalents\">https:\/\/www.bookstime.com\/articles\/cash-and-cash-equivalents<\/a> will be reported on the balance sheet as the  first item in the section with the heading current assets.<\/p>\n<div itemScope itemProp=\"mainEntity\" itemType=\"https:\/\/schema.org\/Question\">\n<div itemProp=\"name\">\n<h3>What is included in cash and cash equivalents?<\/h3>\n<\/div>\n<div itemScope itemProp=\"acceptedAnswer\" itemType=\"https:\/\/schema.org\/Answer\">\n<div itemProp=\"text\">\n<p>Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company&apos;s assets that are cash or can be converted into cash immediately. Cash equivalents include bank accounts and marketable securities such as commercial paper and short-term government bonds.<\/p>\n<\/div><\/div>\n<\/div>\n<p>Even if a debt is available for collection, there is no guarantee that the client will pay. Furthermore, the business may not be given priority in bankruptcy or liquidation procedures. Inventory is a type of current asset that represents items that a business has purchased for sale or that are being manufactured.<\/p>\n<h2 id=\"toc-3\">Understanding Cash and Cash Equivalents (CCE)<\/h2>\n<p>Another example of a cash equivalent is short-term commercial paper (negotiable notes receivable issued by other companies). Cash equivalents are often utilized as a short-term investment option for cash that may not be required for a short period but must still be readily accessible. Nevertheless, both categories of financial instruments are relatively comparable and have low yields. Now that you&#8217;ve known the nitty-gritty of cash and cash equivalents, let us look at the frequently asked questions. Financial covenants are constraints or requirements in loans and other financial contracts that define certain financial performance metrics that a firm must maintain.<\/p>\n<p>However, in terms of other marketable securities, judgment needs to be applied. The cash-to-total asset ratio of the company is 9.95% which is not very significant. Similarly, the cash-to-sales ratio is 11.74 %, which indicates that most sales are in credit. The company is not thinking of any heavy investment in the future as its cash reserves are unlimited compared to the total assets. Second, management attention should be directed to planning future cash flows in order to assure the sufficiency of the balance and to maximize investment income.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Content Accounts Receivable What Makes a Financial Instrument a Cash Equivalent? 2 Cash and Cash Equivalents Understanding Cash and Cash Equivalents (CCE) Cash and Cash Equivalents On the Balance Sheet (Financial Statement) Cash and Cash Equivalents Examples How to calculate it? \u2013 Excel Examples Depending on the amount of detail needed or desired for a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[1046],"tags":[],"class_list":["post-49701","post","type-post","status-publish","format-standard","hentry","category-bookkeeping"],"_links":{"self":[{"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/posts\/49701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/comments?post=49701"}],"version-history":[{"count":1,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/posts\/49701\/revisions"}],"predecessor-version":[{"id":49702,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/posts\/49701\/revisions\/49702"}],"wp:attachment":[{"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/media?parent=49701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/categories?post=49701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ccm-swiss.com\/index.php\/wp-json\/wp\/v2\/tags?post=49701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}