About Off-Balance Sheet Tax Structures

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Off-balance sheet tax structures are created when a company has items within their financing that are not on their balance sheet. Discover how off-balance sheet tax structures help to suggest the taxation level within an organization with help from an experienced accountant in this free video on balance sheets.

Part of the Video Series: Balance Sheets
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Video Transcript

Hi I'm Ryan Levine with Utah Working Capital. Now I'd like to talk about off balance sheet tax structures. Often times the company will have items within their financing that is not on their balance sheet. For example, a line of credit liability, a bank where a set of money is set aside for the company to use but hasn't necessarily been drawn on to date. These financing arrangements are not necessarily recorded on a balance sheet. What companies will do in these situations is they'll create off balance sheet tax structures. This helps suggest the taxation level within the organization. By not reporting these numbers directly within the balance sheet, this will help the company control what is reported to the government, to the IRS and help them control better their tax liability. For further additional questions contact us at utworkingcapital@gmail.com

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