ABONG Rose AKENJI
Is the Enterprise a VIE as defined in the Codification Master Glossary? If so, what criteria cause it to be deemed a VIE? Assume that (1) the Enterprise does not qualify for any scope exceptions and (2) the equity investment by the Nominee Shareholders in the Enterprise represents equity investment at risk.
The enterprise is a VIE as defined in the codification of the master glossary. From the narrative, nominee equity holders do not absorb the losses of the enterprise and do not benefit from the residual gain the residual gain rather goes to the WFOE. The nominee equity holders though they own 100% of the share cannot run the activities of the enterprise; the activities are run by the WFOE as they…show more content… Coconut telegraph
1. Is Coconut’s February 1, 2012, arrangement with Buffett within the scope of ASC 985-605?
The arrangement is in line with scope of 985-605 because as per ASC985-605-15-3c-2 the PCS is more than incidental to the soft ware.
2. On the basis of the response to Question 1, discuss the revenue recognition accounting literature