Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements—an interpretation of APB Opinion No. 10 and a modification of FASB Interpretation No. 39
Summary
APB Opinion No. 10, Omnibus Opinion- 1966, paragraph 7, states that "it is a general principle of accounting that the offsetting of assets and liabilities in the balance sheet is improper except where a right of setoff exists." FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts, defines right of setoff and specifies conditions that must be met to permit offsetting. This Interpretation modifies Interpretation 39 to permit offsetting in the statement of financial position of payables and receivables that represent repurchase agreements and reverse repurchase agreements and that meet the conditions in paragraph 3 herein.
This Interpretation is effective for financial statements issued for periods ending after December 15, 1994. Early application is encouraged.