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IAS 32Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5
WorkpaperIAS 32 — Financial Instruments: PresentationL2 · L3

Offsetting a financial asset and a financial liability: legally enforceable right, intention to settle and net amount presented

3 missions8 sections to document60 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

For each counterparty, record the amounts of the asset and of the liability, the right of set-off (current, not contingent on a future event, enforceable in the normal course of business, on default and on insolvency) and the settlement practices. Both criteria must be met: otherwise the gross amounts are presented. Amounts and facts are case data.

8 sections · 13 blocks · 1 calculation · 0 entries

  • IAS 32 §42

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

3 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Offsetting, puttable instruments, cooperative member shares and the FICE project: a classification and presentation file
Case tasks documented here
  • Alvia: are both offsetting criteria met?
  • Alvia: compute the net amount presented.
  • Brenval: can the receivable and the debt be offset?
1

Facts and data

Inputs

  • Counterparty, instruments concerned and set-off agreement

    TextRequired

    DEPOSIT_AND_LOAN_WITH_THE_SAME_BANK_UNDER_A_MASTER_SET_OFF_AGREEMENT

  • Amount of the financial asset recognised

    Number

    400,000

  • Amount of the financial liability recognised

    Number

    150,000

  • Right of set-off: current or contingent on a future event, enforceable in the normal course of business, on default and on insolvency

    Text

    ENFORCEABLE_IN_THE_NORMAL_COURSE_ON_DEFAULT_AND_ON_INSOLVENCY

  • Intention to settle net or to realise the asset and settle the liability simultaneously: past practices and risk management

    Text

    BALANCES_SETTLED_NET_EVERY_MONTH_DOCUMENTED_PRACTICE

2

Supporting documents

Evidence

  • Documents obtained and referenced (set-off agreement, legal opinion, settlement statements)

    EvidenceRequired

3

Analysis of the two offsetting criteria

Analysis

IAS 32 §42

  • Points examined: offsetting

    ChecklistRequired

    • Current right of set-off, not contingent on a future event
    • Right enforceable in the normal course of business, on default and on insolvency
    • Intention to settle net or to realise the asset and settle the liability simultaneously
    • Both criteria are met together; otherwise gross presentation
4

Calculations

Calculations

IAS 32 §42

  • Net amount presented (asset − liability)

    Calculation

    250,000

    Amount of the financial asset recognised ; − Amount of the financial liability recognised

5

Judgment: right of set-off and intention to settle

Judgment

IAS 32 §42

  • Conclusion on the two criteria

    JudgmentRequired

    Both criteria met: net amount

    Both criteria met: net amount / Right of set-off not met: gross amounts / Intention to settle not met: gross amounts

    Professional judgment: a right contingent on a future event, such as a default, does not meet the criterion of a current right; the intention is shown by practices, not by a statement.

  • Rationale: enforceability of the right and settlement practices

    Text

    CURRENT_ENFORCEABLE_RIGHT_AND_DOCUMENTED_NET_SETTLEMENT

6

Items to document for the offsetting disclosures

Disclosure

IAS 32 §42

  • Information to prepare on offsetting

    Checklist

    • Gross amounts, amounts set off and net amounts presented
    • Amounts subject to a set-off agreement but not set off
7

Conclusion

Conclusion

  • Supported conclusion on each of the two criteria, then net amount presented or gross amounts

    ConclusionRequired

8

Normative references

References

  • Normative references cited in this workpaper

    References

9

Checks and financial statement impact

  • Counterparty and agreement describedPass
  • Criteria judged and supportedPass
  • Asset = net amount + liabilityPass
Assets
0
Liabilities
0
Profit or loss
0
OCI
0
Equity
0