Definition ∞ On-Balance Sheet refers to assets and liabilities that are formally recorded on a company’s financial statements. These items directly affect the company’s financial health and are subject to standard accounting practices and audits. They represent direct ownership or financial obligations of the entity. Transparency regarding on-balance sheet items is essential for investor analysis and regulatory compliance.
Context ∞ In the context of digital assets, whether holdings are classified as on-balance sheet is a significant accounting and regulatory consideration for corporations. Debates often address the appropriate valuation methods and reporting standards for various digital assets. Future accounting guidance will clarify how companies disclose their digital asset positions, affecting financial reporting and investor perception.
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