**Consolidating Variable Interest Entities**5. **Who is required to consolidate a variable interest entity?** The primary beneficiary of a variable interest entity (VIE) is required to consolidate it. This entity usually holds the majority of the risks and rewards associated with the VIE.6. **What are the criteria to determine if a primary beneficiary exists?** To determine if a primary beneficiary exists, the entity must: - Have the power to direct the activities of a VIE that most significantly impact the entity's economic performance. - Have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Answered: 5. Who is required to consolidate a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

**Consolidating Variable Interest Entities**

5. **Who is required to consolidate a variable interest entity?**

The primary beneficiary of a variable interest entity (VIE) is required to consolidate it. This entity usually holds the majority of the risks and rewards associated with the VIE.

6. **What are the criteria to determine if a primary beneficiary exists?**

To determine if a primary beneficiary exists, the entity must:
- Have the power to direct the activities of a VIE that most significantly impact the entity's economic performance.
- Have the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Expert Solution

Step 1

“Since you have asked multiple questions, we will solve the first question for you. If you want any specific question to be solved, then please specify the question number or post only that question.”

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions