If an Entity Qualifies as a Variable Interest Entity (VIE)

question 10

True/False

If an entity qualifies as a variable interest entity (VIE), U.S.GAAP requires the primary beneficiary of the VIE to consolidate the VIE.

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Definitions:

Straight Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Average Accounting Rate of Return

A method to estimate the profitability of investments, calculated by dividing the average annual profit by the initial investment cost.

Straight-Line Depreciation

A scheme for dividing the expenditure of a solid asset over its life span in equal yearly quotas.

Asset

Anything of value owned by an individual or a corporation that can be used to produce positive economic value.