A technique of liability  immunization which permits a debtor to offset  and eliminate a liability with the purchase of government securities or a special risk management contract . For tax, regulatory, contractual or other reasons, the issuer  of debt may find it more appropriate to set aside certain assets-typically government bonds , and/or cash equivalents-against a debt obligation rather than repurchasing and canceling the debt. Unless the dedication of the assets set aside for extinguishing the debt is irrevocable , both the assets and liabilities will continue to appear on the balance sheet.