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Sagot :
These things are assets and liabilities of the company even though they don't show up on the balance sheet. Since there is no equity or debt attached to these goods, they are not required to be reported on the balance sheet.
By using off-balance-sheet financing, businesses can avoid reporting certain assets and obligations on their balance sheets. Financial statements can be shielded from asset ownership and associated debt by OBS assets.
This strategy aids businesses in maintaining low debt-to-equity and leverage ratios, which lower borrowing costs and avoid covenant breaches. Assets that don't show up on the balance sheet are known as off-balance sheet (OBS) assets.
To learn more about balance sheet, click here.
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