Which of the Following Is Not a Factor That Indicates

question 91

Multiple Choice

Which of the following is not a factor that indicates a business enterprise that establishes a variable interest entity (VIE) should consolidate such VIE with its own financial statements?

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

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Definitions:

Form 20-F

A form used by foreign companies to report their financial performance and operational activities to the U.S. Securities and Exchange Commission.

Annual Report

A comprehensive report on a company's activities and financial performance throughout the preceding year.

U.S. Stock Exchange

The U.S. Stock Exchange refers to any of the various stock exchanges operating in the United States where stocks of publicly held companies are bought and sold, such as the New York Stock Exchange (NYSE) and NASDAQ.

Comparability Differences

Variations that arise when comparing financial information due to different accounting policies or frameworks.