UK Accounting Glossary
Netting entails offsetting the value of multiple positions or payments due to be exchanged between two or more parties. Netting is used to determine which party is owed remuneration in a multiparty agreement.
Netting refers to the settlement of mutual obligations between two parties (called bilateral netting) or with a third party acting as a clearinghouse (called multilateral netting) where the net difference (not the gross amounts) is carried forward. Netting is a common practice in trading of foreign exchange, futures, and options.
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This glossary post was last updated: 30th September 2019.