AASB 132 requires an entity to offset a financial asset and a financial liability and present the net amount in the statement of financial position when two conditions are satisfied.Conditions for offsetting are generally NOT satisfied when:
A)financial assets and liabilities have the same primary risk exposure that involve different counterparties.
B)financial assets are pledged as collateral for non-recourse financial liabilities.
C)obligations are expected to be recovered from a third party because of claims under insurance contracts.
D)all of the above situations.

Question

Quizplus · Accepted Answer

AASB 132 specifies that two conditions must be met in order to offset a financial asset and a financial liability and present the net amount in the statement of financial position. The first condition is that the entity must currently have a legally enforceable right to offset the financial asset and the financial liability, and the second condition is that the entity must intend either to settle on a net basis or to realize the asset and settle the liability simultaneously. None of the given situations satisfy these conditions, which means none of them can be offset. Therefore, the correct answer is D, which includes all three scenarios.

AASB 132 Requires an Entity to Offset a Financial Asset