Under IAS 32, financial assets and financial liabilities can be presented on a net basis in the statement of financial position if certain conditions are met. The conditions that must be met for financial assets and financial liabilities to be offset are as follows:

1. The entity must have a legally enforceable right to set off the amounts, and must intend to settle on a net basis, or to realize the asset and settle the liability simultaneously.
2. The entity must have a legally enforceable right to set off the financial asset and the financial liability, and the right must not be contingent on a future event.
3. The entity must be able to settle the net amount, or realize the asset and settle the liability simultaneously, without requiring the consent of another party or relying on a third party to fulfill its obligation.
4. The financial asset and the financial liability must be with the same counterparty, or with counterparties that are part of the same netting arrangement.

If the above conditions are met, the financial assets and financial liabilities can be presented on a net basis in the statement of financial position. However, if any of the conditions are not met, the financial assets and financial liabilities must be presented gross in the statement of financial position.

The purpose of offsetting financial assets and financial liabilities is to present a more accurate picture of an entity's financial position and risk exposures, by reflecting the net amount that the entity has the right to receive or pay in a transaction. This can be particularly important for entities that engage in significant amounts of trading activities, where gross presentation of financial assets and financial liabilities may not provide a meaningful representation of their financial position.