Which of the Following Is Not an Indicator That Requires

question 38

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 fo the VIE.

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Definitions:

National Level

A scale of operation or consideration encompassing an entire country.

International Level

Pertaining to or involving two or more nations or the global scope of activities.

Employee Association

An organization that represents the collective interests of employees, often in negotiations with the employer.

Certified Union

A labor union that has been officially recognized and approved to represent workers in bargaining and legal matters.