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Tuesday 02 September 2014

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IFRS 9: Financial Instruments

IASB Meeting Summaries and Observer Notes


 IASB / FASB November 2010


 

 

The IASB and the FASB discussed the factors for offsetting and made the following tentative decisions:

  • An entity would be required to offset a recognised financial asset and financial liability if it has the unconditional right of offset and intends to either net settle or settle simultaneously.
  • An unconditional right refers to a right of offset that is enforceable in all circumstances (including default by or bankruptcy of a counterparty).
  • Simultaneous settlement refers to realisation of an asset and settlement of a liability at the same moment.

An entity would not be allowed to offset (net) a recognised financial asset and financial liability if the entity has only a conditional right of offset.

 

Date: 11/17/2010