The Primary Beneficiary of a Variable Interest Enterprise

question 50

Multiple Choice

The primary beneficiary of a variable interest enterprise:

• A) must include the assets, liabilities, and results of the variable interest enterprise in its consolidated financial statements.
• B) can simply record income on a cash basis when dividends are received or income accrued.
• C) only recognizes a gain or loss on the sale of its interest in the variable interest enterprise.
• D) only includes the results of the variable interest enterprise if it has in excess of 50% of the
• Voting share capital of the variable interest enterprise.

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Definitions:

Financial Performance

A measurement of how well a company can use assets from its primary mode of business and generate revenues.

Companies In The Industry

Firms that operate within a specific sector, contributing to and competing in the market dynamics of that field.

Ratio Analysis

A quantitative analysis of information contained in a company’s financial statements, used to evaluate performance, liquidity, profitability, and solvency.