Investments

Abstract

Investments come in so many different forms, and may be held for such different purposes, that it can be difficult to formulate a precise definition of them. Although not directly relevant to financial reporting, the Financial Services Act 1986 includes the following in its definition of an investment:

• shares and stock in the share capital of a company;

• debentures, including debenture stock, loan stock, bonds, certificates of deposit and other instruments creating or acknowledging indebtedness including those issued by public bodies;

• warrants or other instruments entitling the holder to subscribe for any of the above;

• certificates or other instruments which confer property rights in respect of the above, rights to acquire, dispose of, underwrite or convert an investment, and rights (other than options) to acquire investments other than by subscription;

• units in collective investment schemes including shares in or securities of an open-ended investment company;

• options to acquire or dispose of currency, gold or silver, or any investment as defined in the Act, including other options;

• futures;

• contracts for differences and similar instruments;

• long-term insurance contracts; and

• rights and interests in any of the above.¹

Each of these is further described in some detail by the Act.