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Deloitte issues comment letter on offsetting exposure draft

  • Deloitte Comment Letter Image

20 Apr 2011

Deloitte's IFRS Global Office has submitted a letter of comment on exposure draft ED/2011/01 'Offsetting Financial Assets and Financial Liabilities'.

The comment letter expresses Deloitte's views on the IASB and FASB's efforts to converge presentation requirements for offsetting financial assets and financial liabilities. The following is an excerpt from the letter:

The Boards have concluded that the presentation of gross amounts of financial assets and financial liabilities generally provides more relevant information than a net presentation and that a gross presentation aligns more closely with the Conceptual Framework's emphasis on providing users with information about the reporting entity's future cash flows. We agree with this conclusion.

We also observe, however, that during the Boards' outreach efforts, users expressed a view that both gross and net information is useful and necessary for analysing financial statements. We therefore encourage the Boards to explore a linked presentation model...where a right of setoff will occur only upon a party's failure to pay or deliver (including in bankruptcy or insolvency), either because (1) the right is conditional or (2) the right is unconditional but the entity otherwise does not have the intent to invoke such right except upon default.

Click to Download our Comment Letter (PDF 71k). All of our past comment letters are here.

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