On January 28, 2011, the FASB and the IASB jointly issued an exposure draft, Offsetting Financial Assets and Financial Liabilities. Entities that historically elected to present derivatives assets and liabilities subject to master netting arrangements on a net basis will be required to report them gross in their statement of financial position. This could significantly impact the balance sheet of many reporting entities that currently apply an accounting policy election to net these amounts.Entities will have to evaluate the method of settlement for any transactions processed through an exchange or clearinghouse in order to ascertain whether a financial asset and financial liability are to be "simultaneously settled." The exposure draft also proposes new disclosure requirements for financial assets and liabilities subject to offset. This Dataline looks at the key aspects of the exposure draft, which is open for public comment through April 28, 2011.