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Off - balance - sheet financing is an attempt to borrow monies in such a way to prevent recording the obligations. Two common forms of
Offbalancesheet financing is an attempt to borrow monies in such a way to prevent recording the obligations. Two common forms of offbalancesheet financing are holding debt at a subsidiary that does not require consolidation under GAAP and holding debt at special purpose entities.
As a response, The FASB has increased disclosure requirements. Which of the statements below are true. Check all that apply.
The recognition of debt in the financial statements occurs only when cash is received in exchange for a future obligation.
Company A owns of Company B Company A is not required to disclose or record the debt of Company B
Disclosure of debt obligations, terms, covenants, property pledged as collateral, debt guarantees, and contingencies associated with debt, contribute to an efficient market and provide investors with meaningful information regarding future cash flows.
The accounting rules both recording and disclosure for specialpurpose entities are complex.
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