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IFRS 9: Financial Instruments

Asset and liability offsetting

 Asset and liability offsetting

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Project milestones


About the project

This project has now been completed.  On 16 December 2011 the IASB and FASB issued common disclosure requirements that are intended to help investors and other users to better assess the effect or potential effect of offsetting arrangements on a company's financial position. The new requirements are set out in Disclosures-Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7).  As part of that project the IASB also clarified aspects of IAS 32 Financial Instruments: Presentation.  The amendments address  inconsistencies in current practice when applying the requirements. 

For more information, download the feedback statement or listen to a podcast [accessible via the links on the right-hand side].



Offsetting, otherwise known as netting, takes place when entities present their rights and obligations to each other as a net amount in their statements of financial position.

In January 2011 the IASB and the FASB published the exposure draft (ED) Offsetting Financial Assets and Financial Liabilities. This was in response to requests from users of financial statements and recommendations from the Financial Stability Board to achieve convergence of the boards’ requirements for offsetting financial assets and financial liabilities.

The offsetting model in IAS 32 Financial Instruments: Presentation requires an entity to offset a financial asset and financial liability when , an only when, an entity currently has a legally enforceable right of set-off and intends either to settle on a net basis or to realise the financial asset and settle the financial liability simultaneously.

The US GAAP offsetting model, while similar to the model in IFRSs, also provides a broad exception which permits entities to present derivative assets and derivative liabilities subject to master netting arrangements net in the statement of financial position even if an entity doesn’t have a current right or intention to settle net.

The different requirements result in a significant difference between amounts presented in statements of financial position prepared in accordance with IFRSs and amounts presented in statements of financial position prepared in accordance with US GAAP, particularly for entities that have large amounts of derivative activities. The proposals in the exposure draft would have replaced the requirements for offsetting financial assets and financial liabilities and would have established a common approach with the FASB.

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Project news

16 December 2011 The IASB issued final amendments to two IFRSs as a result of its offsetting project: (1) Disclosures-Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7), and (2) Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32).  Click here to read the press release for the amendments to IFRS 7, or click here to read the press release for the amendments to IAS 32.

26 May 2011 A summary of outreach activity to May 2011 has been posted, click here

9 May 2011 The IASB and FASB held a public round-table meeting on the Financial Asset and Financial Liability Offsetting project in Norwalk, US. Click here to listen to the webcast from this meeting.

Click here to see the archive of all previous project news.


Last IASB meeting update 

24 April 2013

At the April 2013 IASB meeting, the staff consulted the IASB on this issue. The IASB agreed that the additional disclosure required by the Amendments to IFRS 7 is not specifically required for all interim periods after the first year of application of the Amendments to IFRS 7.

Click here to access all previous IASB updates on this project.

Click here to listen to the IASB meeting audio playback.


Next discussion by the IASB

Redeliberations are complete. No further discussion is planned.


Page last updated: 21 December 2011

Related information


Click here to read a project summary and feedback statement about the offsetting disclosure requirements.

Click here to listen to a podcast introducing the offsetting disclosure requirements.

Listen to the webcast on19/12/11 about the offsetting disclosure requirements..

Click here to read a summary of outreach activity to May 2011

Listen to the round table audios:
- 3 May 2011 London
- 9 May 2011 Norwalk
- 6 Jul 2011 Singapore

Listen to the 31/01/11 webcasts: AM - click here
PM - click here

To listen to the podcast on the January 2011 exposure draft, click here

Project contact

Kumar Dasgupta
Technical Director
email: kdasgupta@ifrs.org

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