BRIDGE THE GAAP

摘要

Offsetting, for accounting purposes, is a presentation issue. Offsetting (or netting) takes place when companies present their rights and obligations to each other as a net amount in their statement of financial position (balance sheet). By contrast, gross presentation refers to separate presentation of asset and liability positions. Offsetting is particularly important for companies such as financial institutions. This is because financial institutions enter into many transactions with each other, as there are few appropriate counterparties for the types of transactions they enter into. This results in financial institutions having a greater number of asset and liability balances with the same counterparty, compared with other sectors.