Which of the Following Is Not an Indicator That Requires

question 68

Multiple Choice

Which of the following is not an indicator that requires a sponsoring firm to consolidate a variable interest entity (VIE) with its own financial statements?

• A) The sponsoring firm has the obligation to absorb potentially significant losses of the VIE.
• B) The sponsoring firm receives risks and rewards of the VIE in proportion to equity ownership.
• C) The sponsoring firm has the right to receive potentially significant benefits of the VIE.
• D) The sponsoring firm has power through voting rights to direct the entity's activities that significantly impact economic performance.
• E) The sponsoring firm is a primary beneficiary of the VIE.

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Definitions:

Confirmation Letter

A letter that summarizes an oral conversation to provide a permanent record of the discussion.

Dictates

Instructions or commands given with authority, often guiding the operation or action of a process or practice.

Discussion Section

A segment within an academic paper or presentation dedicated to analyzing and interpreting findings or engaging in critical discourse.

Internal Legal Memorandum

A document written within a legal office or department, summarizing the facts, issues, and conclusions of a particular legal matter.