One of the Requirements for Setting Off in AASB 132

question 36

Multiple Choice

One of the requirements for setting off in AASB 132 is the intention to offset.Which of the following statements about the "intention to set off" is correct?

• A) The intention to offset is only required where the legal right to set-off is disputed.
• B) Without the intention to offset the past cash flows of the entity will not be affected.
• C) The intention of both parties to settle is insufficient unless a legal right exists.
• D) Must be stipulated in writing for it to apply under ASB 132.
• E) None of the given answers.

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Definitions:

Evaporation

The process by which water changes from a liquid to a gas or vapor, a key part of the Earth's water cycle and energy balance.

Precipitation

Any form of water, liquid or solid, that falls from the atmosphere and reaches the ground, including rain, snow, sleet, and hail.

Melting

The process of turning a solid into a liquid by applying heat.

Shoreline

The shoreline is the boundary line where land meets a body of water, such as an ocean, sea, lake, or river.