What condition must be present when a financial asset and a financial liability are to be offset?
A) The entity has a legally enforceable right to set off the recognised amount
B) The entity intends to either settle on a net basis or realise the asset and settle the liability simultaneously
C) Either A or B may be present
D) Both A and B must be present

Question

Quizplus · Accepted Answer

Both conditions must be present for a financial asset and a financial liability to be offset. The entity must have a legally enforceable right to set off the recognized amount, and the entity must intend to settle on a net basis or realize the asset and settle the liability simultaneously. Therefore, option D is the correct answer.

What Condition Must Be Present When a Financial Asset and a Financial