The closing balance of the bank account corresponds to the answer we calculated in our cash flow statement. Budgeted Cash Flow Statements. Just like the income statement and balance sheet, the cash flow statement can also be drawn up in budget form and later compared to actual figures. An operating lease, used in off-balance sheet financing (OBSF), is a good example of a common off-balance sheet item. Assume that a company has an established line of credit with a bank whose financial covenant condition stipulates that the company must maintain its debt-to-assets ratio below a specified level. Balance sheet (also known as the statement of financial position) is a financial statement that shows the assets, liabilities and owner’s equity of a business at a particular date. The main purpose of preparing a balance sheet is to disclose the financial position of a business enterprise at a given date.

unconditionally cancellable at any time by the bank without prior notice, in which case the CCF would be 10%. The 2014 revision now takes a more nuanced approach to off-balance sheet exposures by using the Basel II framework’s CCFs so that the CCF is not fixed at 100%. For example, letters of credit now have a 50% CCF.