In January 2003, the FASB Released Interpretation 46, "Consolidation of Variable

question 31

Multiple Choice

In January 2003, the FASB released Interpretation 46, "Consolidation of Variable Interest Entities," which:

• A)re-emphasized the need for 50% stock ownership to exert effective control.
• B)expanded U.S.GAAP to consider effective control rather than legal control for consolidated financial statements.
• C)took a "form-over-substance" approach to define control in determining requirements for consolidated financial statements.
• D)defined effective control as ownership of 30% or more of another entity's voting shares.

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Definitions:

Elongation

The process of lengthening or stretching something, commonly referring to the lengthening of molecular chains or the physical body structure.

Axis

A line or reference around which something rotates or is symmetrically arranged, often used in geometry and physics to describe orientation.

Hormone

A naturally occurring compound in the body that directs and controls the operation of specific cells or organs.