Definitions for "Off-balance sheet financing"
Any form of financing, such as an Operating lease, that, for financial reporting purposes, is not required to be reported on the firm's balance sheet.
Financing that does not figure on the balance sheet of the firm. Lease agreements, which are not capitalised, are a type of off-balance sheet financing.
A lease that qualifies as a True Lease for the lessee's financial accounting purposes. Such leases are referred to as off-balance sheet financing due to their exclusion from the balance sheet asset and debt presentation, except for that portion of the payments that is due in the current fiscal period. Full disclosure of such transactions is typically made in the auditor's notes to the financial statements. Periodic payments are recorded as expense items on the lessee's income statement.1