Question 1

The primary beneficiary does not consolidate its interest in a VIE into their consolidated financial statements.

Accepted Answer

A) True 
 B)False  False

Question 2

The primary beneﬁciary will likely record its share of VIE interest revenue on its books.​

Accepted Answer

A) True 
 B)False  True

Question 3

The accounts of the VIE are adjusted to fair value on the date control is achieved.​

Accepted Answer

A) True 
 B)False  True

Question 4

Consolidation procedures are applied to controlling ownership interests in Variable Interest Entities.​

Accepted Answer

A) True 
 B)False

Question 5

The consolidation process for VIE's includes the elimination of all inter-entity transactions as would be the case for control based on stock ownership​

Accepted Answer

A) True 
 B)False

Question 6

In a VIE, the majority of losses or income ﬂow to the primary beneﬁciaries, not the residual interest shareholders shareholder.The distribution of income is not based on common stock ownership.Instead, it is based on contractual agreements that could include interest on loans, management fees or a deﬁned percentage of revenue or income.

Accepted Answer

A) True 
 B)False

Question 7

The primary beneﬁciary has control of the variable interest entity (VIE) based on its power to control the activities of the VIE and the obligation to absorb losses and receive beneﬁts from the VIE.​

Accepted Answer

A) True 
 B)False

Question 8

The entity having control of a VIE is referred to as the parent company.​

Accepted Answer

A) True 
 B)False

Question 9

If the VIE was not a business as deﬁned by ASC 819-10-20 which means it is likely a not for proﬁt entity, there is no goodwill recorded.​

Accepted Answer

A) True 
 B)False

Question 10

Income of the consolidated company is distributed based on contractual terms, not the Primary Company ownership of VIE common stock.​

Accepted Answer

A) True 
 B)False

The primary beneficiary does not consolidate its interest in a VIE into their consolidated financial statements.

The primary beneﬁciary will likely record its share of VIE interest revenue on its books.

The accounts of the VIE are adjusted to fair value on the date control is achieved.

Consolidation procedures are applied to controlling ownership interests in Variable Interest Entities.

The consolidation process for VIE's includes the elimination of all inter-entity transactions as would be the case for control based on stock ownership

The primary beneﬁciary has control of the variable interest entity (VIE) based on its power to control the activities of the VIE and the obligation to absorb losses and receive beneﬁts from the VIE.

The entity having control of a VIE is referred to as the parent company.

If the VIE was not a business as deﬁned by ASC 819-10-20 which means it is likely a not for proﬁt entity, there is no goodwill recorded.

Income of the consolidated company is distributed based on contractual terms, not the Primary Company ownership of VIE common stock.

Business Combinations: New Rules for a Long-Standing Business Practice

Consolidated Statements: Date of Acquisition

Consolidated Statements: Subsequent to Acquisition

Intercompany Transactions: Merchandise, Plant Assets, and Notes

Intercompany Transactions: Bonds and Leases

Cash Flow, Eps, and Taxation

Special Issues in Accounting for an Investment in a Subsidiary

Subsidiary Equity Transactions, Indirect Subsidiary Ownership, and Subsidiary Ownership of Parent Shares

The International Accounting Environment

Foreign Currency Transactions

Translation of Foreign Financial Statements

Interim Reporting and Disclosures About Segments of an Enterprise

Partnerships: Characteristics, Formation, and Accounting for Activities

Partnerships: Ownership Changes and Liquidations

Government and Not for Profit Accounting

Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds

Financial Reporting Issues

Accounting for Private Not-For-Profit Organizations

Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations

Estates and Trusts: Their Nature and the Accountants Role

Debt Restructuring, Corporate Reorganizations, and Liquidations

Derivatives and Related Accounting Issues

Equity Method for Unconsolidated Investments

Filters

Exam 24: Variable Interest Entities

The primary beneficiary does not consolidate its interest in a VIE into their consolidated financial statements.

The primary beneﬁciary will likely record its share of VIE interest revenue on its books.​

The accounts of the VIE are adjusted to fair value on the date control is achieved.​

Consolidation procedures are applied to controlling ownership interests in Variable Interest Entities.​

The consolidation process for VIE's includes the elimination of all inter-entity transactions as would be the case for control based on stock ownership​

The primary beneﬁciary has control of the variable interest entity (VIE) based on its power to control the activities of the VIE and the obligation to absorb losses and receive beneﬁts from the VIE.​

The entity having control of a VIE is referred to as the parent company.​

If the VIE was not a business as deﬁned by ASC 819-10-20 which means it is likely a not for proﬁt entity, there is no goodwill recorded.​

Income of the consolidated company is distributed based on contractual terms, not the Primary Company ownership of VIE common stock.​

Business Combinations: New Rules for a Long-Standing Business Practice

Consolidated Statements: Date of Acquisition

Consolidated Statements: Subsequent to Acquisition

Intercompany Transactions: Merchandise, Plant Assets, and Notes

Intercompany Transactions: Bonds and Leases

Cash Flow, Eps, and Taxation

Special Issues in Accounting for an Investment in a Subsidiary

Subsidiary Equity Transactions, Indirect Subsidiary Ownership, and Subsidiary Ownership of Parent Shares

The International Accounting Environment

Foreign Currency Transactions

Translation of Foreign Financial Statements

Interim Reporting and Disclosures About Segments of an Enterprise

Partnerships: Characteristics, Formation, and Accounting for Activities

Partnerships: Ownership Changes and Liquidations

Government and Not for Profit Accounting

Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds

Financial Reporting Issues

Accounting for Private Not-For-Profit Organizations

Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations

Estates and Trusts: Their Nature and the Accountants Role

Debt Restructuring, Corporate Reorganizations, and Liquidations

Derivatives and Related Accounting Issues

Equity Method for Unconsolidated Investments

Filters

The primary beneﬁciary will likely record its share of VIE interest revenue on its books.

The accounts of the VIE are adjusted to fair value on the date control is achieved.

Consolidation procedures are applied to controlling ownership interests in Variable Interest Entities.

The consolidation process for VIE's includes the elimination of all inter-entity transactions as would be the case for control based on stock ownership

The primary beneﬁciary has control of the variable interest entity (VIE) based on its power to control the activities of the VIE and the obligation to absorb losses and receive beneﬁts from the VIE.

The entity having control of a VIE is referred to as the parent company.

If the VIE was not a business as deﬁned by ASC 819-10-20 which means it is likely a not for proﬁt entity, there is no goodwill recorded.

Income of the consolidated company is distributed based on contractual terms, not the Primary Company ownership of VIE common stock.