Off balance sheet transactions

Mike Davies, Ron Paterson and Allister Wilson
Additional contact information
Mike Davies: Ernst & Young
Ron Paterson: Ernst & Young
Allister Wilson: Ernst & Young

Chapter Chapter 13 in UK Gaap, 1992, pp 745-803 from Palgrave Macmillan

Abstract: Abstract ‘Off balance sheet finance’ has been defined as ‘the funding or refinancing of a company’s operations in such a way that, under legal requirements and existing accounting conventions, some or all of the finance may not be shown on its balance sheet’.1 The term ‘off balance sheet transactions’ is usually used to describe those transactions which meet such an objective. However, they can involve more than this; firstly, assets as well as liabilities are normally removed (or excluded) from a company’s balance sheet; secondly, an off balance sheet transaction is likely also to have an impact on the profit and loss account. For example it may result in the reporting of a profit or loss on the ‘disposal’ of an asset taken off the balance sheet; alternatively it may involve the exclusion of profits or losses from the profit and loss account, because the activities which give rise to these profits or losses are not dealt with in the consolidated financial statements. This chapter does not discuss transactions which use the legal requirements and existing accounting conventions to reflect what are in substance borrowings under another heading, such as minority interest; these are referred to in Chapter 12. Other ‘window dressing’ transactions which are effectively transient in nature are discussed at 3.5 of Chapter 21.

Keywords: Balance Sheet; Call Option; Financial Instrument; Share Capital; Application Note (search for similar items in EconPapers)
Date: 1992
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-12998-0_13

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349129980

DOI: 10.1007/978-1-349-12998-0_13

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().