Here’s a high-level look at the consolidation process under ASC 810, Consolidation. The focus is on the variable interest entity model with an overview of the analysis process as well as more detailed comments on the scope exceptions and characteristics of a VIE.
Posts Tagged: ASC 810
It’s nice when I can reuse some language from a previous post on a different topic. Today, the topic is materiality in the context of the variable interest entity (VIE) consolidation model. Here’s the recycled language from my post on derivatives and materiality: “When I think about materiality I do so from both a qualitative… Read more »
I’ll start out this post by reminding you that the entire point of the variable interest entity (VIE) analysis is to determine if a party other than an entity’s majority shareholder should consolidate the entity into its financial statements. The VIE consolidation model is premised on the notion that, under certain conditions, parties other than… Read more »
A variable interest entity is typically designed for a very specific purpose and to create very specific risks. These risks are then, by design, absorbed by the legal entity’s variable interests. The absorption of variability often creates significant control over the legal entity that is not vested in the voting equity of the entity. The… Read more »