Sep 30, 2011 · The balance sheet is an extremely useful tool for all users to quickly get an idea of how a company is doing. The balance sheet is usually described as a snapshot of a company's financial position. off-balance-sheet interest arbitrage will also have to consider how to measure and control basis risk (where, for example, the underlying obligations have the same maturity or interest rate roll-over periods, but the reference rates differ). Foreign exchange risk 15. Off-balance-sheet activities have a significant impact on banks foreign exchange
COMMERCIAL BANK’S OFF-BALANCE SHEET ACTIVITIES 1245 have allowed banks to avoid certain regulatory costs such as minimum reserve, deposit insurance, and capital adequacy requirements. While, some of the off-balance sheet instruments lead to risk reduction, others increase the risk exposure of the The formal accounting distinctions between on and off-balance sheet items can be complicated and are subject to some level of management judgment. However, the primary distinction between on and off-balance sheet items is whether or not the company owns, or is legally responsible for the debt. Off Balance Sheet Activity. Sometimes, companies execute transactions not recorded on any financial statement. These ‘off balance sheet (OBS)” items are assets or liabilities that exist but are not required by IFRS to be included on financial statements (balance sheet). Off-Balance sheet financing can de-emphasize (hide) a particular activity.