Offsetting, ASC 210

Offsetting
FASB Interpretations (FIN)

FASB Interpretation (FIN) No. 39, March 1992
“Offsetting of Amounts Related to Certain Contracts
an interpretation of APB Opinion No. 10 and FASB Statement No. 105”

FASB Interpretation (FIN) No. 41, December 1994
“Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements
an interpretation of APB Opinion No. 10 and a modification of FASB Interpretation No. 39”

General Principle
1. It is not proper to offset assets and liabilities in the balance sheet.
2. An exception
–> when a right of setoff exists

Right of setoff
Debtor’s right to “discharge” the debt
–> by applying (A) against the debt
(A) an amount that “other party” owes to the debtor

Right of setoff exists if all of the following are satisfied:

1. Amounts of debt are determinable
2. Reporting entity has the “right” to setoff
3. The right is enforceable by law
4. Reporting entity has the “intention” to setoff

 

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