Global Standards for the world economy

Tuesday 18 December 2018

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IAS 32 Financial Instruments: Presentation—Offsetting and cash pooling


 Issue rejected—Agenda decision

IAS 32 Financial Instruments: Presentation—Offsetting and cash pooling

The Interpretations Committee received a request to clarify an issue related to IAS 32 Financial Instruments: Presentation.

The issue relates to whether a particular cash-pooling arrangement would meet the requirements for offsetting in accordance with IAS 32—specifically, whether the regular physical transfers of balances (but not at the reporting date) into a netting account would be sufficient to demonstrate an intention to settle the entire period-end account balances on a net basis in accordance with paragraph 42(b) of IAS 32.

For the purposes of the analysis, the Interpretations Committee considered the specific example included in the request, which describes a cash-pooling arrangement involving subsidiaries within a group, each of which have legally separate bank accounts.

Project stages

Board deliberations

Expected completion date of phase: March 2016 - Completed