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.