offset

(noun)

Anything that acts as counterbalance; a compensating equivalent.

Related Terms

Examples of offset in the following topics:

  • Current Guidelines for Expense Recognition

    • For an expense to be recognized under the matching principle, it must be both incurred and offset against recognized revenues.
    • For an expense to be recognized, the obligation must be both incurred and offset against recognized revenues.

  • Overview of Statement Changes and Errors

    • Make an offsetting adjustment to the opening balance of retained earnings for that period; and
    • Non-counterbalancing errors are those that will not be automatically offset in the next accounting period.

  • Loss Restoration

    • The revaluation surplus account accounts for increases in asset value, and it also offsets any downward revisions, such as an impairment loss, in asset value.

  • Expense Recognition

    • The expenditure offsets the income the business earned and is used to calculate the business's profit.

  • Issuing Bonds

    • The premium (higher interest rate) is to offset the assumed higher than average risk associated with investing in the company.

  • The LIFO Reserve

    • Under this system, the business may maintain costs under FIFO but track an offset in the form of a LIFO reserve.

  • Reporting Contingencies

    • A warranty expense is debited for the provision amount that will offset product sales revenue in the income statement and a credit is posted to warranty provision liability.

  • Overview of Income Tax Accounting

    • If a company realizes a net loss for tax purposes, the IRS allows the company to offset this loss against prior year's taxable income (which could result in a refund of taxes paid in prior periods).

  • Recognizing Accounts Receivable

    • Since not all customer debts will be collected, businesses typically estimate the amount of and then record an allowance for doubtful accounts which appears on the balance sheet as a contra account that offsets total accounts receivable.

  • Importance of Recognition and Measurement

    • Offset against recognized revenues, which were generated from those expenses (related on the cause-and-effect basis), regardless of when cash is paid out.