FASB Issues ASU On Balance Sheet Offsetting
In order to add clarity and eliminate diversity in practice, the Financial Accounting Standards Board (FASB) has issued Accounting Standards Update (ASU) 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.
The ASU is intended to reduce unintended costs while providing users with the information necessary to understand the extent to which certain financial instruments are offset pursuant to master netting arrangements.
ASU 2013-01 clarifies that ordinary trade receivables and payables are not in the scope of ASU 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. ASU 2011-11 applies only to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions that are offset in accordance with specific criteria contained in the FASB Accounting Standards Codification.
An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning on or after January 1, 2013. An entity should provide the required disclosures retrospectively for all comparative periods presented. The effective date of ASU 2013-01 is the same as the effective date for ASU 2011-11.
The full text of ASU 2013-01 is available by clicking here.
Readers should not act upon information presented without individual professional consultation.