in its Background Comments for ASU 2013‐01 that the disclosure requirements do not apply to:
Loan and customer deposits at the same financial institution.
Financial instruments only subject to collateral agreement. The FASB views these as primarily credit enhancements.
Trade receivables and payables with a counterparty to be netted in the event of default. The FASB views these as primarily credit enhancements. In addition, requiring these to be disclosed would cause an undue burden on financial statement preparers.
Receivables and payables of brokers dealers resulting from unsettled regular‐way trades.
Offsetting relates to presentation only. If an asset and liability are presented net, it does not mean that the entity no longer has a contractual right or obligation. Therefore, to adequately inform the users, the Codification requires entities to disaggregate the relevant information. The disclosures must include:
1 The gross amounts for those recognized assets and liabilities,
2 The amounts offset to determine the net amounts presented in the balance sheet,
3 The net amounts presented in the balance sheet,
4 Amounts subject to an enforceable netting arrangement not included in the statement of financial position, instruments that the entity makes an election not to offset, and the amounts related to financial collateral.
5 The net amount after deducting “d” from “c” above.(ASC 210‐20‐50‐3)
Unless another format is more appropriate, the disclosures above must be presented in tabular format, separately by assets and liabilities. (ASC 210‐20‐50‐4)
In addition to the quantitative information, the entity must present a description of the rights of setoff for recognized assets and liabilities subject to an enforceable master netting or similar arrangement. (ASC 210‐20‐50‐5)
PRESENTATION AND DISCLOSURE EXAMPLES
Example 3.1: Statement of Financial Position—Highly Aggregated
ABC Corporation Statement of Financial Position December 31, 20X1
| Assets | |
| Current assets | xxx |
| Long‐term investments | xxx |
| Property, plant, and equipment, net | xxx |
| Deferred income tax assets | xxx |
| Goodwill | xxx |
| Intangible and other assets | xxx |
| Total assets | xxx |
| Liabilities and Shareholders' Equity | |
| Current liabilities | xxx |
| Deferred income tax liabilities | xxx |
| Long‐term debt | xxx |
| Total liabilities | xxx |
| Capital stock | xxx |
| Additional paid‐in capital | xxx |
| Retained earnings | xxx |
| Accumulated other comprehensive income | xxx |
| Total shareholders' equity | xxx |
| Total liabilities and shareholders' equity | xxx |
The following more comprehensive statement of financial position includes more line items (for details about specific assets and liabilities) than are found in most statements of financial position.
Example 3.2: Statement of Financial Position—Highly Detailed
ABC Corporation Statement of Financial Position December 31, 20X1
| Assets | |||
| Current assets: | |||
| Cash and bank deposits: | |||
| Restricted to current bond maturity | $xxx | ||
| Unrestricted | xxx | $xxx | |
| Short‐term investments: | |||
| Marketable equity securities (trading) | xxx | ||
| Marketable debt securities (available‐for‐sale) | xxx | ||
| Refundable income taxes | xxx | ||
| Receivables from affiliates | xxx | ||
| Accounts receivable | xxx | ||
| Less allowance for uncollectible accounts | (xxx) | xxx | |
| Notes receivable due in 20X2 | xxx |
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