Off-balance sheet finance: Difference between revisions
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imported>Doug Williamson m (Spacing 21/8/13) |
imported>Doug Williamson m (Add 'bookkeeping' after 'double-entry'.) |
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Any form of finance that does not result in a corresponding liability appearing on the entity's published balance sheet. | 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. | On double-entry bookkeeping 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. | 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. | ||
Revision as of 08:18, 25 July 2014
Any form of finance that does not result in a corresponding liability appearing on the entity's published balance sheet.
On double-entry bookkeeping 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.
