What is a Hidden asset?

Hidden assets are goods and real estates which don’t show up on the balance sheet of the company which owns them. This might be legal like long term contracts or leases. People who use hidden assets are trying to escape from taxes like if they put on the balance sheet a hidden asset then it’s most likely has lower price then the actual market one, so the company or the person won’t be paying that much taxes.

Other people might hide assets from the creditors if they have filed for bankruptcy this means that the creditor won’t claim it if he doesn’t know about it’s existence. Though there might be legitimate reasons for why a company doesn’t add every single asset what he owns to the profit and loss document.