Question
What would your responce be to this question. Two of the biggest current assets on the balance sheet are Government of Canada bonds and Derivatives
What would your responce be to this question.
Two of the biggest current assets on the balance sheet are Government of Canada bonds and Derivatives (Bank of Canada, n.d., b). Government of Canada bonds are a government issued debt given to Canadians to assist in covering federal costs (Chen, 2022). Derivatives, indemnity agreements with the Government of Canada are in place to help balance changes resulting from the bond purchase programs (Bank of Canada, n.d., b). Prior to the pandemic, bonds were quite consistent and derivatives were non-existent (Bank of Canada, n.d., b). However, once the pandemic hit, Government of Canada Bonds skyrocketed and derivatives also became more prominent.
Two of the biggest current liabilities are notes in circulation and members of payments Canada. Notes in circulation refers to the legal tender (currency) that has been released by the government for paying debts (Bank of Canada, n.d., a). The pandemic triggered a massive influx in Members of Payment Canada, but only a slight gradual increase of notes in circulation (Bank of Canada, n.d., b).
The increase in the balance sheet since the start of the covid-19 pandemic is a result of the government's response to aide in the financial recovery of the economy. This included lowering interest rates to increase monetary supply for those who needed it (Bank of Canada, n.d., c).
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