Accounting Question : Balance Sheet?

Question

Our Company maintain checking account with two banks : Bank A and Bank B.
On the date of Balance sheet, Bank A has a debit balance of 1,00,000/- while Bank B shows a overdraft balance of 80,000/- (credit) in our books.
Can we not show net bank balance (Debit) Rs.20,000/- only in the balance sheet? Why?
Which principle of accounting prevents me from doing that?

Answer 1

Since the balances are with different banks, the amounts should not be offset as there is no legal right of set-off. In addition, IAS 1 Presentation of Financial Statements doesn't permit offsetting:

Offsetting
32. Assets and liabilities, and income and expenses, shall not be offset unless required or permitted by a Standard or an Interpretation.
33. It is important that assets and liabilities, and income and expenses, are reported separately. Offsetting in the income statement or the balance sheet, except when offsetting reflects the substance of the transaction or other event, detracts from the ability of users both to understand the transactions, other events and conditions that have occurred and to assess the entity’s future cash flows. Measuring assets net of valuation allowances—for example,
obsolescence allowances on inventories and doubtful debts allowances on receivables—is not offsetting.

Answer 2

You can show that as one balance in the balance sheet, no problem. But you have to reference it and give the details of both bank balances at the end/bottom of the company balance sheet, Just to make it clearer for the non finance users. Auditors will look into it anyway.
(This maybe different for different countries or streams)
The reason is that you have to show the company assets in the balance sheet, doesnt matter where you keep them or how you keep them, as long as they are correct and not misleading, both individually or when aggregated.

Answer 3

forget about my answer the answer before me makes much more sense.

good luck