What Was the Original Motivation by FASB on SPEs

question 55

Multiple Choice

What was the original motivation by FASB on SPEs?

• A) To establish a mechanism to encourage companies to invest in needed assets while keeping related debt of its books
• B) To keep the large amount of debt off the books
• C) To sell non-producing assets to the SPE
• D) To select which assets to sell to the SPEs affecting the gain

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Definitions:

Equivalent Fractions

Fractions that have different numerators and denominators but represent the same value or proportion of a whole.

Proportions

The relationship in size, amount, or degree between different parts of a whole.

Body Surface Area

The total external surface area of the human body, important in determining dosages for medical treatments and assessing skin involvement.

Pounds

A unit of weight in the imperial system, equivalent to 0.453592 kilograms.