Which of the following criteria is applicable with respect to determining when a variable interest entity (VIE) must be consolidated into the sponsoring firm's financial statements?
A. A consolidation must occur if the firm is entitled to receive all of the VIE's residual returns.
B. A consolidation must occur if the firm has a controlling financial interest and is the VIE's primary beneficiary.
C. A consolidation must occur if the sponsoring firm owns more than 50% of the VIE's equity.
D. A consolidation must occur regardless of the risk of loss exposure.
Answer: B
You might also like to view...
An accounting measurement is concerned with all except which of the following?
a. Money measure b. Financial position c. Separate entity d. Business transaction
Advisory ADR systems are mechanisms that allow the parties to resolve their own disputes without the help of any third party, instead using the negotiation process.
Answer the following statement true (T) or false (F)
Jose is married filing a joint return. In 2019, he earned $160,000 of profit from his sole proprietorship, which operates a service business. The business paid no W-2 wages in 2019 and owns no tangible business property.a. Compute Jose's allowable QBI deduction if his joint return reflects taxable income of $300,000 before the deduction. b. Compute Jose's allowable QBI deduction if his joint return reflects taxable income of $340,000 before the deduction.
What will be an ideal response?
A company is most likely doomed to failure in a foreign country if it _____
a. does not understand the country's culture b. does not emphasize its home country's language over that of the country c. varies its marketing mix based on the country's economic growth d. pays attention to the country's demographics