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:

Zero Coupon Bonds

Bonds that do not pay interest during their lifetime and are sold at a discount to their face value.

Coupon Payment

A periodic interest payment made to bondholders during the life of the bond.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, not necessarily reflecting its actual market value.

Government Of Canada

The federal administration and institutions of Canada, responsible for national policy and governance.