An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if:a. The VIE has issued no voting stock.b. The variable interest held by the enterprise involves a lease.c. The enterprise has a controlling financial interest in the VIE.d. Other equity interests in the VIE have the obligation to absorb the expected losses of the VIE.
An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if:a. The VIE has issued no voting stock.b. The variable interest held by the enterprise involves a lease.c. The enterprise has a controlling financial interest in the VIE.d. Other equity interests in the VIE have the obligation to absorb the expected losses of the VIE.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An enterprise that holds a variable interest in a variable interest entity (VIE) is required to consolidate the assets, liabilities, revenues, expenses, and noncontrolling interest of that entity if:
a. The VIE has issued no voting stock.
b. The variable interest held by the enterprise involves a lease.
c. The enterprise has a controlling financial interest in the VIE.
d. Other equity interests in the VIE have the obligation to absorb the expected losses of the VIE.
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