Which Statement Is Correct About Offsetting

question 4

Multiple Choice

Which statement is correct about offsetting?

• A)Offsetting is required under IFRS when the entity is willing and legally able to offset.
• B)Offsetting is required under IFRS when the company intends to settle on a net basis.
• C)Offsetting is generally permitted under IFRS,unless it is specifically prohibited.
• D)Offsetting is required under IFRS when there is a legally enforceable right of offset.

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Definitions:

Service Department Costs

Expenses related to the departments that support the main operations of a business but do not directly generate revenue, such as human resources or maintenance.

Allocating

The process of assigning costs or resources among various projects, departments, or segments.

Predetermined

Established in advance or determined beforehand.

Lump-Sum Amounts

Single payments made for a group of items or services rather than individual transactions.