On the face of balance sheet and income statement there are certain items which are never considered as offsetting for certain items (something that\u2019s not allowed on most cases as we\u2019ve pointed out in one our posts about offsetting), but compulsory to be included within certain line item groups. If anything, it\u2019s called netting.\u00a0<\/p>\n
On the balance sheet those items (and the reasons) are as follows:<\/p>\n
–\u00a0\u00a0\u00a0\u00a0 Accumulated depreciation of property, plant and equipment \u2013 as the name refers, we\u2019re depreciating the asset group and as such, it\u2019s not acceptable to show the depreciation somewhere else on its own;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0 Impairment provisions are done for specific items and as such, they should be included in the group that\u2019s impaired, with an item that\u2019s impaired;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0 Accumulated amortisation of intangible assets should be treated as depreciation for PPE items (see above) when it comes to classification on the balance sheet;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0 Provisions for inventory obsolescence and bad debts are to be included in the same group as the item that needs the provision.<\/p>\n
When it comes to the income statement, the items or netting transactions, which are never considered as offsetting, are as follows:<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Disposal proceeds and carrying value on disposal are shown as net;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Expenditure and related reimbursement under a contractual agreement;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Foreign exchange gains and losses;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Gains and losses arising on financial instruments held for trading;<\/p>\n
–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Releases of provisions against expenses incurred.<\/p>\n
If you think about it, there are specific items, which are always tied together \u2013 you cannot have one without another (i.e. a provision for bad debt or depreciation for assets) \u2013 and as such, should always be disclosed together on the face of statements.<\/p>\n","protected":false},"excerpt":{"rendered":"
On the face of balance sheet and income statement there are certain items which are never considered as offsetting for certain items (something that\u2019s not allowed on most cases as we\u2019ve pointed out in one our posts about offsetting), but compulsory to be included within certain line item groups. If anything, it\u2019s called netting.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,46],"tags":[],"class_list":["post-3908","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-1-annual-report"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=3908"}],"version-history":[{"count":3,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3908\/revisions"}],"predecessor-version":[{"id":3911,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3908\/revisions\/3911"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=3908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=3908"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=3908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}