FASB, IASB Announce New Disclosure Requirements on Offsetting

FASB and the IASB today issued investor-focused common disclosure requirements on the effect or potential effect of offsetting arrangements on a company’s financial position.

U.S. GAAP and IFRS differ on the criteria for offsetting, also known as netting. Offsetting presents net amounts of assets and liabilities in the balance sheet as a result of an entity’s rights of set-off.

Neither IFRS nor U.S. GAAP previously required disclosure of all amounts set off in the balance sheet, and that prevented investors from comparing the rights of set-off between entities applying IFRS and U.S. GAAP. (Journal of Accountancy)