No, prepaid expenses such as rent paid in advance, advance salary, and advance payment to suppliers of raw materials are not considered financial assets under IFRS. They are considered prepayments or advances, which are typically classified as non-financial assets on the balance sheet.

For example, if a company pays $12,000 in rent in advance for the next year, the journal entry to record the transaction would be:

Prepaid Rent account $12,000

Cash account $12,000

The $12,000 would be recorded as a non-financial asset on the balance sheet, and would be gradually expensed over the course of the year as the rent is incurred. No financial asset or liability is created in this transaction.

Similarly, if a company makes an advance payment to a supplier for raw materials, the payment is recorded as an asset (e.g., Prepaid Expenses or Advances to Suppliers) and is gradually expensed as the materials are received. There is no creation of a financial asset or liability in this transaction.

In the case of advance salary, the payment is recorded as a liability (e.g., Accrued Salaries) and is gradually reduced as the employee earns their salary over time. Again, there is