The comment letter supports the proposal to clarify that the right to set off the financial asset and the financial liability must be unconditional and legally enforceable in all circumstances. The comment letter also supports the proposal to specify the disclosure requirements about rights to offset financial assets and financial liabilities of an entity and the related arrangements, including information about collateral and master netting arrangements. However, the Board should reconsider the amendments to IAS 32 regarding ‘simultaneous settlement’ and the treatment of cash collateral and margin accounts, adopting a more principles-based approach.

 

Furthermore, EFRAG urges the IASB to consider the proposals in the ED in the context of the existing disclosure requirements in IFRS 7 Financial Instruments: Disclosures, taking into account the disclosure proposals made in other consultation documents in respect of accounting for financial instruments. This is needed to ensure that the level of guidance included in the disclosure standard remains consistent and balanced across topics.

Finally, EFRAG disagrees with the requirement to disclose grossed-up information about financial instruments that meet the offsetting criteria and that have been offset on the face of the statement of financial position.

Press release