Creative accounting involves the use of accounting practices and principles that adhere to the letter of the rules of standard accounting practices but deviate from the spirit of those rules. This kind of accounting presents company financial performance in an overly favorable light, often inflating profits and hiding liabilities.
Off-balance-sheet (OBS) refers to assets or liabilities that do not appear on a company's balance sheet but potentially have a significant impact on the company's financial health.
Denoting assets or liabilities that do not appear on the balance sheet of a company. Various off-balance-sheet arrangements have been entered into by companies wishing to avoid full disclosure of their assets and liabilities through complex legal agreements, joint ventures, specially created subsidiaries, and structured finance arrangements.
Window dressing refers to any practice aiming to make a financial situation appear more favorable than it really is, often used by accountants to enhance the look of balance sheets.
