Definition, Meaning & Synonyms

setoff

noun

/ˈsɛtˌɔf/

Definition

A setoff is a legal term referring to a claim or amount that reduces or offsets another claim or amount owed.

Examples

After reviewing the invoices, the accountant applied the setoff to reduce the total amount payable.
The company filed for bankruptcy, and the creditors argued for a setoff against the outstanding debts.

Meaning

In a financial context, a setoff allows one party to subtract a debt or obligation from a claim that they have against another party, effectively balancing the two amounts.