Consolidation of variable interest entities

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Financial interpretation No. 46R, "Consolidation of Variable Interest Entities," reference several FASB Concepts Statements in motivating the need to identify and consolidate variable interest entities. FIN 46R also expands the traditional definition of control as provided in Accounting Research Bulletin 51. "Consolidated Financial Statements." Review the Summary to FIN 46R and explain the following.

  • In what ways do the conclusions in FIN 46R relate to concepts of relevance and reliability?
  • How do the definitions of assets and liabilities relate to the consolidation of VIEs?
  • Why is a majority voting interest insufficient evidence of a controlling financial interest in a VIE?

Reference no: EM13140916

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