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A Variable Interest Entity Must Be Consolidated into the Financial

question 57

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A variable interest entity must be consolidated into the financial statements of the sponsoring entity if the sponsoring entity has either a controlling or a noncontrolling financial interest.

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Definitions:

Benefit

An advantage or profit gained from something.

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it without paying for it.

Free Rider

A person who receives the benefit of a good but avoids paying for it

Free-Rider

An individual who benefits from resources, goods, or services without paying for the cost of the benefit.

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