What is Off Balance Sheet - OBS under BASEL? #ChartAcc

Friday, January 10, 2014

ChartAcc.com - OBS can be defined as follows:

Definition:

  • An asset or debt
  • that does not appear on a company's balance sheet.
  
Impact:
  • Company does not have legal claim or responsibility for.
 
Examples:
  • Operating Lease
  • Loans that are securitized and sold off as investments
  • Partnerships, Joint ventures, Controlling Interests
 
OBS in relation to BASEL:
  • Not showing liabilities in the Balance Sheet means overcasting of Financial resources
  • Financial Rations can be manipulated like Debt : Equity Ratio
 

For more on Basel click here.

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