Off balance sheet financing (OBSF)

Off balance sheet financing (OBSF),

Definition of Off balance sheet financing (OBSF):

  1. Financial resources obtained from sources other than equity investors and lenders (such as through joint ventures, strategic alliances, and operating leases) which are excluded from the balance sheets asset and liability presentation. OBSF allows a firm to enhance its leverage ratio and return on investment, and to avoid breaking any loan covenant. Full disclosure of such financing, however, may be required to be made in the notes (footnotes) accompanying the balance sheet.

Meaning of Off balance sheet financing (OBSF) & Off balance sheet financing (OBSF) Definition