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: these include complex legal agreements, the use of joint ventures or specially created subsidiaries, and securitizations and other structured finance arrangements. In off-balance-sheet finance (OBSF) a company removes some or all of its finance from the balance sheet, usually to enhance its accounting ratios, such as the gearing ratio and return on capital employed, or to avoid breaking any agreements it has made with the banks in respect of the total amount it may borrow. Similarly, banks have used a variety of off-balance-sheet arrangements, typically involving securizations and special purpose vehicles, to avoid their obligations under the capital adequacy rules. The accounting profession has attempted to counter the most misleading of these practices by emphasizing that accounting should reflect the commercial reality of transactions and not simply their legal form. Financial Reporting Standard 5, Reporting the Substance of Transactions, provides specific guidance for certain transactions, such as factoring and consignment stock, for which companies previously used off-balance-sheet finance. In the USA, the Sarbanes–Oxley Act of 2002 introduced new regulations concerning the disclosure of off-balance-sheet arrangements in the wake of the Enron scandal of 2002. In the banking and financial sector, the lack of transparency arising from complex off-balance-sheet practices has been identified as a major factor in the financial meltdown of 2008. See creative accounting; hidden reserve.