Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value; thus, common stock cannot be considered a cash equivalent, but preferred stock acquired shortly before its redemption date can be.
Example: an investment in shares cannot be considered a cash equivalent, but preference shares acquired shortly before their specified redemption date can be. Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value.
Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value. Example: an investment in shares cannot be considered a cash equivalent, but preference shares acquired shortly before their specified redemption date can be.
Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value. Example: an investment in shares cannot be considered a cash equivalent, but preference shares acquired shortly before their specified redemption date can be.