Which of the Following Statements Regarding Consolidation of a VIE

question 118

Multiple Choice

Which of the following statements regarding consolidation of a VIE with its primary beneficiary is true?

• A) The consolidation of a VIE with its primary beneficiary requires the business enterprise to follow a separate process than the one required for consolidations based on voting interests.
• B) All intra-entity transactions between the primary beneficiary and the VIE are included in the consolidation.
• C) Only intra-entity transactions between the primary beneficiary and the VIE resulting from intra-entity transfers are eliminated in the consolidation.
• D) VIEs with controlling interests must include one hundred percent of the primary beneficiary's net income in a consolidation.
• E) The allocation of the VIE's net income is based on an analysis of the underlying contractual arrangements between the primary beneficiary and other holders of variable interests.

---

Definitions:

Old Engine

A term referring to an engine that has been in use for a considerable time and may not incorporate modern technologies or efficiencies.

Cleaned

Cleaned refers to the process of removing dirt, impurities, or unwanted substances from something, making it clean.

Serious Head Injuries

Severe trauma or damage to the skull or brain, often requiring immediate medical attention to prevent long-term consequences.

Car Accident

An unexpected and unintentional road incident involving one or more vehicles, often resulting in damage or injury.