View source for Off balance sheet

(OBS).

1. ''Financing''.

Off balance sheet financing means assets and liabilities are acquired indirectly by an entity by way of a financial structure but are not purchased directly by the sponsoring entity, in such a way that the liabilities are not required to be disclosed in the sponsoring (reporting) 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 sponsoring entity).


2. ''Financial reporting''. 

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 FRS 102 Sections 2, 11, 12 and 23.


3. ''Liquidity and funding risk in banks.''

Off balance sheet sources of liquidity risks for banks include items which might cause demands for additional funding in the future. These include:
*Contingent liabilities such as guarantees.
*Undrawn lending facilities.
*Derivative instruments.
*Securitisation special purpose vehicles.


== See also ==
* [[Balance sheet]]
* [[Contingent liabilities]]
* [[Derivative instrument]]
* [[Entity]]
* [[FRS  102]]
* [[IFRS 16]]
* [[Liquidity risk]]
* [[Off balance sheet finance]]
* [[Operating lease]]
* [[Required Stable Funding]]
* [[Securitisation special purpose vehicle]]
* [[Substance over form]]

[[Category:Accounting,_tax_and_regulation]]