A disclosure technique that is used for two accounts/ line items, on the statement of financial position, that are directly connected in such a way that both have to be “cross-referenced” for clarity. For example, under current assets, accounts receivable (A/Rs) used as collateral for a bank loan shall be cross-referenced to bank loan payable (under liabilities) as follows:

On assets side:

Accounts receivable posted as collateral on a bank loan payable —– CU 50,000

On liabilities side:

Bank loan payable- collateralized by accounts receivable —- CU 35,000