Offsetting
/ˈɒfsɛtɪŋ/
Definitions
- (n.) The act of balancing one debt or claim against another, so that the debtor pays only the difference.
The company applied offsetting to reduce the amount owed.
- (n.) In accounting, the practice of recording an asset and a liability with equal amounts to reflect mutual obligations.
Offsetting is used in financial statements to show net positions.
- (n.) In environmental law, measures taken to compensate for environmental damage or emissions by equivalent conservation actions elsewhere.
The developer purchased carbon credits as a form of offsetting.
Related terms
See also
Commentary
Offsetting often requires explicit agreement or statutory authority; careful drafting ensures clarity on the debts or obligations subject to offsetting.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.