Off balance sheet
(OBS).
1.
In financing where assets and liabilities are acquired indirectly by an entity by way of a financial structure but are not purchased directly by the entity, in such a way that the liabilities are not required to be disclosed in the entity's balance sheet.
The trend in financial reporting over time has been to restrict the types of structures which may be accounted for 'off balance sheet' in this way (instead requiring the liabilities to be appropriately reported in the balance sheet of the reporting entity).
2.
The indirect financial reporting of the related liabilities within the notes to the financial statements - or possibly not at all - rather than directly on the face of the balance sheet.
Sometimes known as 'off balance sheet treatment'.
Relevant accounting standards include Sections 2, 11, 12 and 23 of FRS 102.
