Is term deposit come under cash and cash Equivalent

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Daya

Daya (Querist)
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06 December 2023 whether fixed deposit ( Term deposit) comes under cash and cash Equivalent under scheduled III ?

CA Syed Raza Abbas Rizvi

CA Syed Raza Abbas Rizvi (Expert)
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12 December 2023 cash and cash equivalents include cash on hand, demand deposits, and short-term, highly liquid investments that are easily convertible to known amounts of cash and have a short maturity period, typically within three months.

Whether fixed deposits qualify as cash and cash equivalents depends on their maturity and liquidity. Fixed deposits with a maturity period exceeding three months may not meet the criteria for cash and cash equivalents. However, if a fixed deposit has a short maturity and is readily convertible to cash, it might be considered as such.