CASH EQUIVALENT
Cash equivalent: translation
A short-term security that is sufficiently liquid that it may be considered the financial equivalent of cash. The New York Times Financial Glossary
* * *
cash equivalent cash equivalent ➔ equivalent
* * *
An asset that is so easily and quickly convertible to cash that holding it is equivalent to holding cash. A Treasury bill is considered cash equivalent. This term is also used to describe an alternative method of liquidating a position, whereby the seller provides the cash equivalent to the buyer rather than the security itself.Settling by cash equivalent is a much simpler process than providing the underlying bonds or shares. It is usually done when the counter party to a deal has no interest in owning the underlying securities but wishes to protect himself against interest rate or market moves.
► See also Cash.
* * *
cash equivalent UK US noun [C]
► MONEY »
The insurance policy states that the insurer will endeavour to replace your lost or damaged goods rather than offer a cash equivalent.
► [
often plural]
ACCOUNTING,
FINANCE »
The company believes that its existing cash and cash equivalents are sufficient to meet their cash requirements during the next twelve months.