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Off Balance Sheet
An asset or liability of a company that is not shown on its balance sheet. For example, a company may wish to finance a project by moving the risk of doing so from its balance sheet to a subsidiary. This allows it to be financed without affecting shareholders' interests or adding to the parent company's debt burden. For some companies off balance sheet assets and liabilities may be a routine way of conducting business. For example, a financial institution may offer asset management or brokerage services to its clients. Such assets are likely to belong directly to the client and the company will have no claim on them. Off balance sheet items usually have to be referred to in the notes to a company's accounts. Items are not always moved off balance sheet for legitimate reasons. Companies have been known try to mislead or flatter their results by doing so.