1. Determining whether JV is a variable interest entity.
According to the ASC 810-10-15-14, an entity shall be determined as a VIE if the following condition exists:
“The total equity investment (equity investments in a legal entity are interests that are required to be reported as equity in that entity’s financial statements) at risk is not sufficient to permit the legal entity to finance its activities without additional subordinated financial support provided by any parties, including equity holders.”
The equity investment at risk in this case doesn’t include the equity from ElectricCo because it is financed by AutoCo, a party related to the entity. In addition, the 70% debt financing is guaranteed by AutoCo. The bank is not willing to provide
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Determining which entity should consolidate JV.
According to the ASC 810-10-25-38A, the entity which has a variable interest that provide it with a controlling financial interest is defined as the primary beneficiary. And that entity will consolidate the
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The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance
b. The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The quantitative approach described in the definitions of the terms expected losses, expected residual returns, and expected variability is not required and shall not be the sole determinant as to whether a reporting entity has these obligations or rights.”
Since the decision-making authority of JV is equally shared between AutoCo and ElectricCo, neither one of them would hold a controlling financial interest. Then we should consider which entity directs the activities that most significant impact the economic performance of JV.
“Only one reporting entity, if any, is expected to be identified as the primary beneficiary of a VIE. Although more than one reporting entity could have the characteristic in (b) of this paragraph, only one reporting entity if any, will have the power to direct the activities of a VIE that most significantly impact the VIE’s economic
CVS Health Corporation is an integrated pharmacy healthcare and head quartered in Woonsocket, RI. The President and CEO of CVS is Larry J. Merlo. The company has three segments, Pharmacy services, Retail pharmacy and Corporate. CVS was previously known as Caremark Corporation and the name was changed to CVS on September 3rd 2014.
11. Investors and creditors are particularly interested in this financial statement because it tells them what is happening to the company’s most important resource?
It is stated that DeviceCo has put in $550,000 towards LeaseMed’s equity, while Pharmador put in $450,000. This totals $1 million dollars of equity. All $1 million dollars are considered “at-risk”, since these investments in the legal entity (LeaseMed) participate significantly in profits and losses even if those investments do not carry voting rights (ASC 810-10-15-14).
The company’s existing portfolio has high risk options. They have been funding companies that requires huge amount of capital which increases the company’s risk. Also it was mentioned in the case that firm is experiencing a “Resource Problem”. Members of investment firm had been part of inner
It has been a serious process for many organizations to raise capital which automatically has business and financial risks involved.
Session held at the SVABA center. During session DI need it to remain Jeiden several time to stayed out of other people's conversation and finish table time. Based on data collection, DI need it to prompt Jeiden to stop several time and listen to instructions given by DI. Which most of the time he was distracted and need it several directive prompt to finish his task. Based on Jeiden's mom information, Jeiden shows his private part to his peer during school.
I think it is a good decision, CVS stops selling tobacco. Cigarettes are the main leading cause of preventable disease, disability and death. CVS is a health care provider, not a general store where shoppers can stop in to pick up some Pepsi, deodorant, and a pack of smokes. Dropping to sell tobacco will not be much of a financial sacrifice for the company either. Because, cigarettes are responsible for even less of its profits, but for a CVS company that makes most of its money by selling prescription drugs. More than half of CVS’s revenue comes from its "pharmacy services"
In the summer of 1998, Nantucket Nectar created a subsidiary of their brand called Juice Guys. This new product was comprised of fresh juice and fruit smoothie drinks that were taking over the West Coast. Within three-and-a-half months, Juice Guys had sold a total of 175,000 items ranging from smoothies, yogurts, sorbets, Nantucket Nectar drinks and fresh squeezed juices. Juice Guys’ revenue went up to 91% and they made a profit of $227,000 in sales.
Jelisa, you did a great job understanding the critical issues raised in this case study. Over half of your paper was dedicated to proposed solutions, a great way to ensure a variety of options for the client. While you were able to clearly depict the “effect” of leadership dysfunctions within the company, you did not spend as much effort explaining the “causes” triggered by Boyer’s leadership style, Lloyd’s ineffectiveness in affecting his peers, and the build-up of prior team building efforts. These are all critical aspects of the case study that needed to be introduced for any reader to reasonably follow your analysis. Moving forward, I would recommend that you spend some more time developing a full argument from beginning to end during the
SFAC No. 6 defines equity as the residual interest in the assets of an entity that remains after deducting its liabilities. If options and warrants do not meet the definition of liabilities, then they must meet the definition of equity. A liability is an obligation that embodies a future sacrifice of assets. The company owes no assets to option or warrant holders. There is no present obligation to surrender assets or perform services. If stock options and warrants do not meet the definition of
ALEXANDER J. JEREZ, social security No. 721-99-8542 with residence in Harrisonburg, Virginia, hereinafter referred to as the “Assignor” currently holds a fifty percent (50%) membership interest in A 2 Z Properties, LLC, and a Virginia Limited Liability Company.
Entering Argentine market in 1993-1994 was a good strategic decision for Continental as one of the TOP5 cable TV companies in the US despite certain risks for several reasons:
Edocs, on the other hand, will argue that CRV, based on the firm valuation, has proposed an investment amount and that CRV should also be responsible for raising the funds. There is no justifiable business reason for penalizing the founders if CRV is not successful in finding a syndicate partner. The founders would not want to bear the risk and the costs of CRV not finding a co-investor.
Since this equity capital is usually small, it is prudent for him to decide on a mixture of equity and debt capital which will not only guarantee the highest expected return but also not impair the viability of the development. A developer’s
Provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity