# ASC 210-20-45: Balance Sheet — Offsetting — 45 Other Presentation Matters Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/210/20/#45-other-presentation-matters) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:1004ee2ebd5591b78d929f65859a5b5addb2f4a4ec700fe88c290c34e93b6414 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 210-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/210/20/#45-other-presentation-matters) SEC content: no #### Right of Setoff Conditions ##### [210-20-45-1](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:51c04d62d1183753669b877b657f2dc591104cec86a3b5a1ce440eab2e495d97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [right of setoff](https://asc.understandingaccounting.org/glossary/r/#right-of-setoff "A right of setoff is a debtor's legal right, by contract or otherwise, to discharge all or a portion of the debt owed to another party by applying against the debt an amount that the other party owes to the debtor.") exists when all of the following conditions are met: 1. a Each of two parties owes the other determinable amounts. 2. b The reporting party has the right to set off the amount owed with the amount owed by the other party. 3. c The reporting party intends to set off. 4. d The right of setoff is enforceable at law. ##### [210-20-45-2](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:b8ea9b7d742df1161ad41669877b58f3adfe618c24617e8e6ab8074be016834e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A debtor having a valid right of setoff may offset the related asset and liability and report the net amount. ##### [210-20-45-3](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:92f3e9006c9a6e5058b7efa34c563e006293b4817dacd8ad01033b8dfe6e240c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the parties meet the criteria specified in paragraph [210-20-45-1](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-1), specifying currency or interest rate requirements is unnecessary. However, if maturities differ, only the party with the nearer maturity could offset because the party with the longer term maturity must settle in the manner that the other party selects at the earlier maturity date. ##### [210-20-45-4](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-4) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:c66bf3fb4fb33227166e58a17e37f713cf258b228b74b55bd239b0545dca98f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a party does not intend to set off even though the ability to set off exists, an offsetting presentation in the statement of financial position is not representationally faithful. ##### [210-20-45-5](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-5) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:823b94ec700c476f959e196597c5d6dddb8162917bfe6974f0267ee4a3be6f82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Acknowledgment of the intent to set off by the reporting party and, if applicable, demonstration of the execution of the setoff in similar situations meet the criterion of intent. #### Offsetting Securities Against Taxes Payable ##### [210-20-45-6](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-6) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:d62307c22f6ca48195674fc96a7d8f9a51d8c506664bc52d03e1536000786d98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The offset of cash or other assets against the tax liability or other amounts owing to governmental bodies shall not be acceptable except in the circumstances described in the following paragraph. ##### [210-20-45-7](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-7) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:35cf3cace830952b7e080c563d7afe9e3cbae603d61dbef4728219a60d9e689d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Most securities issued by governments are not by their terms designed specifically for the payment of taxes and, accordingly, shall not be deducted from taxes payable on the balance sheet. The only exception to this general principle occurs when it is clear that a purchase of securities (acceptable for the payment of taxes) is in substance an advance payment of taxes that will be payable in the relatively near future, so that in the special circumstances the purchase is tantamount to the prepayment of taxes. This occurs at times, for example, as an accommodation to a local government and in some instances when governments issue securities that are specifically designated as being acceptable for the payment of taxes of those governments. #### Assurance that Right of Setoff Is Enforceable in a Bankruptcy ##### [210-20-45-8](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-8) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:c9764f477d492c94dc989d2f90899933d886905427fdaccb6e4599e2f19afd83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. State laws about the right of setoff may provide results different from those normally provided by contract or as a matter of common law. Similarly, the U.S. Bankruptcy Code imposes restrictions on or prohibitions against the [right of setoff](https://asc.understandingaccounting.org/glossary/r/#right-of-setoff "A right of setoff is a debtor's legal right, by contract or otherwise, to discharge all or a portion of the debt owed to another party by applying against the debt an amount that the other party owes to the debtor.") in bankruptcy under certain circumstances. Legal constraints should be considered to determine whether the right of setoff is enforceable. ##### [210-20-45-9](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-9) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:915b7d48f27937d20176887026d8ccf3ab0431d82ee54a9aac99d5761cd76a29 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The phrase _enforceable at law_ encompasses the idea that the right of setoff should be upheld in bankruptcy. The nature of support required for an assertion in financial statements that a right of setoff is enforceable at law is subject to a cost-benefit constraint and depends on facts and circumstances. All of the information that is available, either supporting or questioning enforceability, should be considered. Offsetting is appropriate only if the available evidence, both positive and negative, indicates that there is reasonable assurance that the right of setoff would be upheld in bankruptcy. ##### [210-20-45-10](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-10) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:515a0408fdb5d6c05299ffda2e877a2315478b4250f63dcf9b080f9c52d87973 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). #### Repurchase and Reverse Repurchase Agreements ##### [210-20-45-11](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:fde7031b5e375738dc4f91f28320518bacd7677dedaf6560cb139775ecfa169d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Notwithstanding the condition in paragraph [210-20-45-1(c)](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-1), an entity may, but is not required to, offset amounts recognized as payables under [repurchase agreements accounted for as collateralized borrowings](https://asc.understandingaccounting.org/glossary/r/#repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A repurchase agreement (repo) refers to a transaction in which a seller-borrower of securities sells those securities to a buyer-lender with an agreement to repurchase them at a stated price plus interest at a specified date or in specified circumstances. A repurchase agreement accounted for as a collateralized borrowing is a repo that does not qualify for sale accounting under Topic 860. The payable under a repurchase agreement accounted for as a collateralized borrowing refers to the amount of the seller-borrower's obligation recognized for the future repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a reverse repo.") and amounts recognized as receivables under [reverse repurchase agreements accounted for as collateralized borrowings](https://asc.understandingaccounting.org/glossary/r/#reverse-repurchase-agreement-accounted-for-as-a-collateralized-borrowing "A reverse repurchase agreement accounted for as a collateralized borrowing (also known as a reverse repo) refers to a transaction that is accounted for as a collateralized lending in which a buyer-lender buys securities with an agreement to resell them to the seller-borrower at a stated price plus interest at a specified date or in specified circumstances. The receivable under a reverse repurchase agreement accounted for as a collateralized borrowing refers to the amount due from the seller-borrower for the repurchase of the securities from the buyer-lender. In certain industries, the terminology is reversed; that is, entities in those industries refer to this type of agreement as a repo.") if all of the following conditions are met: 1. a The repurchase and reverse repurchase agreements are executed with the same counterparty. 2. b The repurchase and reverse repurchase agreements have the same explicit settlement date specified at the inception of the agreement. 3. c The repurchase and reverse repurchase agreements are executed in accordance with a master netting arrangement. 4. d The securities underlying the repurchase and reverse repurchase agreements exist in book entry form and can be transferred only by means of entries in the records of the transfer system operator or [securities custodian](https://asc.understandingaccounting.org/glossary/s/#securities-custodian "The securities custodian for a securities transfer system may be the bank or financial institution that executes securities transfers over the securities transfer system, and book entry securities exist only in electronic form on the records of the transfer system operator for each entity that has a security account with the transfer system operator."). Book entry securities meeting the criterion in this paragraph exist only as items in accounting records maintained by a transfer system operator. This requirement does not preclude offsetting of securities held in book entry form solely because other securities of the same issue exist in other forms. 5. e The repurchase and reverse repurchase agreements will be settled on a securities transfer system that operates in the manner described in paragraphs [210-20-45-14 through 45-17](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-14) , and the entity must have associated banking arrangements in place as described in those paragraphs. Cash settlements for securities transferred shall be made under established banking arrangements that provide that the entity will need available cash on deposit only for any net amounts that are due at the end of the business day. It must be probable that the associated banking arrangements will provide sufficient [daylight overdraft](https://asc.understandingaccounting.org/glossary/d/#daylight-overdraft "Daylight overdraft or other intraday credit refers to the accommodation in the banking arrangements that allows transactions to be completed even if there is insufficient cash on deposit during the day provided there is sufficient cash to cover the net cash requirement at the end of the day. That accommodation may be through a credit facility, including a credit facility for which a fee is charged, or from a deposit of collateral.") or other intraday credit at the settlement date for each of the parties. The term _probable_ is used in this Subtopic consistent with its use in paragraph [450-20-25-1](https://asc.understandingaccounting.org/asc/450/20/#450-20-25-1) to mean that a transaction or event is likely to occur. 6. f The entity intends to use the same account at the clearing bank or other financial institution at the settlement date in transacting both the cash inflows resulting from the settlement of the reverse repurchase agreement and the cash outflows in settlement of the offsetting repurchase agreement. ##### [210-20-45-12](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-12) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:460dec4690faf65d21e4057a0a83daafb95a4b8c559fb502de80d79375cee785 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entity's choice to offset or not shall be applied consistently. Net receivables resulting from the application of this Subtopic shall not be offset against net payables resulting from the application of this Subtopic in the statement of financial position. ##### [210-20-45-13](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-13) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:cd0a6bd30c512615102f18a45100806a0bd0b0e66ea766be16855e2ae05e0ddb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [210-20-45-11](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11) does not apply to amounts recognized for other types of repurchase and reverse repurchase agreements executed under a master netting arrangement; however, those amounts could otherwise meet the conditions of paragraph [210-20-45-1](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-1) for a right of setoff. Therefore, unless all conditions in that paragraph are met, the amount recognized under a repurchase agreement that does not settle in accordance with all the conditions of paragraphs [210-20-45-11 through 45-17](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11) may not be offset against the amount recognized under a reverse repurchase agreement merely because the agreements are executed with the same counterparty under a master netting arrangement. The gross unconditional receivables and payables recognized in the statement of financial position related to those types of repurchase and reverse repurchase agreements provide useful information about the timing and amount of future cash flows that would be lost if those amounts were offset. #### Securities Transfer System ##### [210-20-45-14](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-14) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:482d7f2f5bec4002797fd72e554697e150ae3a5dc1dd05388764a4fb807ad87f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance describes a securities transfer system for repurchase agreements and reverse repurchase agreements (and associated banking arrangements) that meets the requirements of paragraph [210-20-45-11](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11). In a securities transfer system for repurchase agreements and reverse repurchase agreements that meets the requirements of that paragraph, cash transfers are initiated by notification from the owner of record of the securities to its securities custodian to transfer those securities to the counterparty to the agreement. The securities custodian for a securities transfer system may be the bank or financial institution that executes securities transfers over the securities transfer system, and book entry securities exist only in electronic form on the records of the transfer system operator for each entity that has a security account with the transfer system operator. Book entry securities exist only as items of account on the controlling records of the transfer system operator. Banks or other financial institutions may maintain subsidiary records of book entry securities. Book entry securities may be transferred on the subsidiary records of a bank or financial institution but, for entities that have a security account with the transfer system operator, may be transferred from the account of such an entity only through the transfer system operator. ##### [210-20-45-15](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-15) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:6fb691a9356f13e56bb4f0e7e4ad49260c8835bb4a63da2d6ad4d47898ec948e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under associated banking arrangements, each party to a same-day settlement of both a repurchase agreement and a reverse repurchase agreement would be obligated to pay a gross amount of cash for the securities transferred from its counterparty but would be able to reduce that gross obligation by notifying its securities custodian to transfer other securities to that counterparty the same day. ##### [210-20-45-16](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-16) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:6b65860e5d253a52ba409d3c7271fce36d08a06202578d8093460da6ea139a5b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, each party is responsible for maintaining available cash on deposit only for the amount of any net payable unless it fails to instruct its securities custodian to transfer securities to its counterparty. Failure by either party to instruct its securities custodian to transfer securities owned of record would result in that party's failing to receive cash from the counterparty and, thereby, would require that party to have available cash on deposit for the gross payable due for securities transferred to it. The failure also shall be an event of default under the master netting arrangement required by paragraph [210-20-45-11](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-11). The event of default, in turn, shall entitle the other party to terminate the arrangement and demand the immediate net settlement of all contracts. ##### [210-20-45-17](https://asc.understandingaccounting.org/asc/210/20/#210-20-45-17) Pending content: no Source downloaded (UTC): 2026-09-09T22:59:16.403Z to 2026-09-09T22:59:16.403Z Record version: sha256:7bdc35af503d73f46ffc03ed92e89fb33beafb12c4255c364f0dbc1b18e4c5b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If both parties transfer the appropriate securities in settlement of the repurchase and reverse repurchase agreements, the party with a net receivable will not need any cash to facilitate the settlement, while the party with a net payable will need only to have available the required net amount due at the end of the business day.