Offsetting of assets and liabilities, income and expenses

Learning objectives

• Explain why offsetting is permitted only when a Standard requires or permits it.L1
• Calculate the net amount presented when offsetting is required or permitted by a Standard.L1, L2

Normative references

• IAS 1 §32Assets and liabilities, and income and expenses, are not offset unless required or permitted by an IFRS Accounting Standard.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

1 question

• Lumen SA holds a receivable of 300,000 from a customer and owes 120,000 to the same customer (case facts). No IFRS Accounting Standard requires or permits offsetting here (case data). How does IAS 1 treat these two amounts in the statement of financial position?L1