What Is a Balance Sheet Item?

Off-balance sheet items , as the name implies, refer to items that are not reflected in the balance sheet or notes.

Off-balance sheet items

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Off-balance sheet items , as the name implies, refer to items that are not reflected in the balance sheet or notes.

Most of these projects are related to assets and debt. It may involve leases, affiliates or contingent liabilities, such as a letter of credit. It also involves loan commitments, futures, forward contracts and other derivatives.

Some companies may have significant off-balance sheet assets and liabilities. For example, financial institutions often provide asset management or brokerage services to their customers. Most of the assets (mostly securities) belong to individual customers, and the company provides customers with management, custody or other services. The company itself does not have the right to claim assets, but has some basic fiduciary responsibilities to customers. Financial institutions may formally list off-balance sheet items in their financial reports; their accounting statements may also be classified as assets under management. ^[1]