What Is the Original Motivation by FASB on SPEs

question 65

Multiple Choice

What is 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.

Apply empathy in adapting messages to the readers' needs.

Recognize the importance of audience perspective in effective messaging.

Define media richness and select suitable communication channels.

Understand the use of bias-free language in business writing.

---

Definitions:

Bond Premiums

The amount by which the market price of a bond exceeds its face value, typically due to interest rates being lower than the bond's coupon rate.

Term Bond

A term bond is a type of bond that has a fixed maturity date at which the principal amount is to be paid back to investors.

Maturity Date

The specific date on which the principal amount of a bond, loan, or other financial instrument is due to be paid in full.

Contract Rate

The interest rate specified in a contract, such as that in a loan or bond agreement.