The European Financial Reporting Advisory
Group (EFRAG) is seeking comment on the possible endorsement of the
amendments to IAS 32 and IFRS 7.
The offsetting model in IAS
32 Financial Instruments: Presentation requires
an entity to offset a financial asset and a financial liability
when it 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 International Accounting Standards Board
(IASB) issued amendments to IAS 32 Offsetting Financial
Assets and Financial Liabilities to add application
guidance addressing inconsistencies in current practice when
applying the requirements.
The IASB also issued IFRS
7 Disclosures–Offsetting Financial Assets and Financial
Liabilities, which requires disclosures that are intended to
help users to assess better the effect or potential offsetting
arrangements on a company’s financial position.
EFRAG’s consultation aims to canvas opinion on
its draft endorsement advice and effects study. The matter is open
for comment 25 February.