The favourite off balance sheet financing trick used to be leasing. Use any illustrative numerical examples you may wish to:

(a) Define the term ‘off balance sheet financing’ and state why it is popular with companies.

(b) Illustrate what is meant by the above quotation in the context of leases and discuss the accounting treatments and disclosures required by IAS 17 which have limited the usefulness of leasing as an off balance sheet financing technique.

(c) Suggest two other off balance sheet financing techniques and discuss the effect that each technique has on balance sheet assets and liabilities, and on the profit and loss account.