off-balance Sheet


off-balance Sheet
OBS A liability or other item that is not included in a *balance sheet. *Creative accounting techniques often aim at manipulating *financial statements through off-balance sheet transactions, "in which significant corporate resources, *income or *cash flow are never brought into... audited *financial statements because of the terms in which the relevant *contracted transactions are written (for example, *leases, *quasi-subsidiary companies, *joint ventures, and *contingent contracts)" (Lee, 1993, 144). *Generally Accepted Accounting Principles around the world have increasingly narrowed the scope for off-balance sheet activity. See also *substance over form.

Auditor's dictionary. 2014.

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