Obligation and Off-balance sheet finance: Difference between pages

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1.
Any form of finance that does not result in a corresponding liability appearing on the entity's published balance sheet.   
 
On double-entry principles the asset being financed cannot appear either.  
Any financial commitment undertaken, most commonly in relation to repaying money.   
 
The effect of such financing and accounting methods is to show the company's borrowings and financial risk at a lower level than they really are.
For example the obligation to repay a bond - together with related interest - or the obligation to repay other borrowings or other debt.
 
This type of obligation is sometimes known as a 'debt obligation'.


== See also ==
* [[Balance sheet]]
* [[Double entry]]
* [[ED 2010/9]]
* [[Finance lease]]
* [[Gearing]]
* [[IAS 17]]
* [[Liabilities]]
* [[Off balance sheet]]


2.
More generally, any legally binding financial or non-financial commitment.
3.
More broadly still, any type of commitment, whether or not it is legally binding.
== See also ==
* [[Aval]]
* [[Bond]]
* [[Debt]]
* [[Obligor]]

Revision as of 14:20, 23 October 2012

Any form of finance that does not result in a corresponding liability appearing on the entity's published balance sheet. On double-entry principles the asset being financed cannot appear either.

The effect of such financing and accounting methods is to show the company's borrowings and financial risk at a lower level than they really are.

See also


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