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Accounting & Reporting

Off-Balance-Sheet

Also called: off balance sheet financing, SPE, special purpose entity

Off-balance-sheet arrangements keep obligations out of reported liabilities through structures the accounting rules don't require consolidating. Enron's special purpose entities are the notorious case, and operating leases were the largest legitimate example until standards changed. Each cycle of tightening is followed by new structures, which is why the notes on commitments and guarantees stay worth reading.

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