In each of the situations below, state whether the financial asset and financial liability must be offset in the books of Company A as at 30 June 2012, and explain why.
(a) Company A owes company B $500 000 due on 30 June 2013. Company B owes company A $300 000 due on 30 June 2013. A legal right of set-off between the two companies is documented in writing, and the parties have indicated their intent to settle the amounts on a net basis.
(b) Company A owes company B $500 000 due on 30 June 2013. Company B owes company A $300 000 due on 31 March 2013. A legal right of set-off between the two companies is documented in writing, and the parties have indicated their intent to settle the amounts on a net basis whenever possible.
(c) Company A owes company B $500 000, due on 30 June 2013. Company C owes company A $300 000 due on 30 June 2013.
(d) Company A owes company B $500 000, due on 30 June 2013. Company C owes company A $500 000 due on 30 June 2013. A legal right of set-off between the three companies is documented in writing, and the parties have indicated their intent to settle the amounts on a net basis.
(e) Company A owes company B $500 000, due on 30 June 2013. Company A has plant and equipment with a fair value of $500 000 that it pledges to Company B as collateral for the debt.