Cash equivalent

A short-term security that is sufficiently liquid that it may be considered the financial equivalent of cash. The New York Times Financial Glossary

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cash equivalent cash equivalent equivalent

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   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.

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cash equivalent UK US noun [C]
MONEY an amount of money that has the same value as something: »

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 money in a company's bank accounts and other assets that can easily be changed into money: »

The company believes that its existing cash and cash equivalents are sufficient to meet their cash requirements during the next twelve months.

Financial and business terms. 2012.

Look at other dictionaries:

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