If an Entity Is Not Considered a VIE, the Determination

question 28

Multiple Choice

If an entity is not considered a VIE, the determination of consolidation is based on whether:

• A) the voting rights are proportional to the obligations to absorb expected losses or receive expected residual returns.
• B) the total equity at risk is sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties.
• C) the equity investments or investments in subordinated debt are at risk.
• D) one of the entities in the consolidated group directly or indirectly has a controlling financial interest (usually ownership of a majority voting interest) in the other entities.

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Definitions:

Turbine Flow Meter

A turbine flow meter is a device used to measure the flow rate of a fluid within a pipe, utilizing a turbine that rotates with the flow of the fluid.

Strain Gauge Load Cell

A strain gauge load cell is a device used to measure force or load by converting the deformation (strain) of a material into an electrical signal.

Electromagnetic Latching Relay

A type of relay that maintains its state after being actuated, using a permanent magnet to hold the armature in position until it is reset.