A type of financial asset that constitutes money (cash) held in, and assets whose value can be converted into, a fixed or determinable amount of money (cash). For example, $10,000 of cash is a monetary asset and it will maintain its monetary value/ numerical value ($10,000) over time. Under accounting principles, a monetary asset doesn’t gain or lose value over some time. However, in reality monetary assets may be impacted by inflation or deflation, and as a result their real value doesn’t remain fixed over the long run, and even over the short run in specific cases.
Monetary assets include cash, investments, accounts receivable, and notes receivable.
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