> Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value; thus, common stock cannot be considered a cash equivalent
"Marketable securities" is an extremely broad category. Some marketable securities are cash equivalents, but common stocks are not. Their value is too volatile to be considered a cash equivalent.
To qualify as a cash equivalent, an asset must have very little chance of decreasing in value. Such assets tend to have very low return on investment.
Yet the Wikipedia article says they are cash equivalent - that a cash equivalent is one where the investment is quickly convertible to cash. Common stocks qualify, and are explicitly listed in the article as qualifying.
I find it extremely improbable that a sophisticated company like Apple would let $13 billion sit around in an unproductive investment. If you can quote an accounting rule that says "cash equivalents" cannot be common stock, I'd like to see it.
The wikipedia article you linked explicitly says that common stock is not a cash equivalent. I just quoted a sentence that says common stock is not a cash equivalent. Here it is again since you missed it the first time:
> Another important condition a cash equivalent needs to satisfy is that the investment should have insignificant risk of change in value; thus, common stock cannot be considered a cash equivalent
You mean the securities article? Of course it did. Common stock is a security. It is not a cash equivalent. Preferred stock is only a cash equivalent if it is within three months of its redemption date, at which point the market value will be very close to the value at maturity.
"Marketable securities" is an extremely broad category. Some marketable securities are cash equivalents, but common stocks are not. Their value is too volatile to be considered a cash equivalent.
To qualify as a cash equivalent, an asset must have very little chance of decreasing in value. Such assets tend to have very low return on investment.