What is meant by capital markets?
Capital markets, also known as long-term capital markets, are an important part of the financial markets. As a theoretical counterpart to the money market, the capital market is usually a market in which medium to long-term (more than one year) funds (or assets) are lent and financed. It is called a capital market because of the long maturity and risk involved in long-term financial activities, which have a long-term more stable income and are similar to capital investments.

The main characteristics of the capital market are.
1, Long financing periods
At least one year or more, but also up to several decades, even without maturity date. For example: medium and long-term bonds have a maturity of more than 1 year; stocks have no maturity date, they are permanent securities with no maturity date; closed-end funds generally have a duration of 15-30 years.

2, Relatively poor liquidity
The funds raised in the capital market are mostly used to solve medium and long-term financing needs, so liquidity and realisation are relatively weak.

3, High risk and high return
Due to the long term of financing, the possibility of major changes is also high and market prices are prone to fluctuations, so investors need to bear greater risks. At the same time, as a reward for the risk, the returns are higher.
In the capital market, the suppliers of funds are mainly savings banks, insurance companies, trust and investment companies and various funds and individual investors; while the demand side of funds is mainly enterprises, social groups, government agencies, etc. The objects of their transactions are mainly medium and long-term credit instruments, such as stocks and bonds, etc. The capital market mainly includes the medium and long-term credit market and the securities market.

4, The volume of funds borrowed and lent is large.
5, Large price movements.

What are the financial assets?
Financial assets include cash on hand, accounts receivable, notes receivable, loans, advances, other receivables, interest receivable, debt investments, equity investments, fund investments, derivative financial assets, etc.
Financial assets are symmetrical to physical assets and refer to assets in the form of value owned by an entity or individual. It is an intangible right to claim a physical asset.

Classification of financial assets.
1, Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale on initial recognition, and financial assets that are not classified as held-to-maturity investments, loans and receivables and are measured at fair value through profit or loss. Normally, financial assets classified as such should have quoted prices in an active market. At the same time, the accounting treatment of available-for-sale financial assets is similar to, but different from, the accounting treatment of financial assets at fair value through profit or loss.

2, Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed maturity, fixed or determinable recoveries and that the enterprise has the explicit intention and ability to hold to maturity. The accounting treatment of held-to-maturity investments should mainly address the calculation of the effective interest rate of the financial asset, the determination of the amortised cost, the recognition of gain over the holding period and the treatment of gain or loss upon disposal of the financial asset.

3, Financial assets at fair value through profit or loss
Such financial assets can be further classified as financial assets held for trading and financial assets directly designated as at fair value through profit or loss.