Under IAS 32, a financial asset is defined as any asset that is cash, an equity instrument of another entity, or a contractual right to receive cash or another financial asset. Examples of financial assets include cash, accounts receivable, stocks, bonds, and derivatives.

A financial liability, on the other hand, is defined as any liability that is a contractual obligation to deliver cash or another financial asset to another entity. Examples of financial liabilities include loans, bonds, accounts payable, and financial derivatives such as options and futures contracts.

The key difference between a financial asset and a financial liability is the direction of the contractual obligation. In the case of a financial asset, the contractual obligation is for the entity to receive cash or another financial asset from another entity. In the case of a financial liability, the contractual obligation is for the entity to deliver cash or another financial asset to another entity.

Another difference between financial assets and financial liabilities is their classification and measurement. Financial assets and financial liabilities are classified and measured differently under IAS 32 depending on their nature, purpose, and expected cash flows. Financial assets may be classified as held to maturity, loans and receivables, available for sale, or held for trading, while financial liabilities may be classified as held for trading or other financial liabilities measured at amortized cost.

Overall, the distinction between financial assets and financial liabilities is important for accounting purposes as it affects how these instruments are presented in the statement of financial position and how changes in their fair value are recognized in profit or loss or other comprehensive income.