Multiple Choice
Which of the following is not an indicator that requires a sponsoring firm to consolidate a variable interest entity (VIE) with its own financial statements?
A) The sponsoring firm has the obligation to absorb potentially significant losses of the VIE.
B) The sponsoring firm receives risks and rewards of the VIE in proportion to equity ownership.
C) The sponsoring firm has the right to receive potentially significant benefits of the VIE.
D) The sponsoring firm has power through voting rights to direct the entity's activities that significantly impact economic performance.
E) The sponsoring firm is a primary beneficiary of the VIE.
Correct Answer:
Verified
Correct Answer:
Verified
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