Perspective and Issues


Scope and Scope Exception


Definitions of Terms

Concepts, Rules, and Examples

Special-Purpose Entities and Variable Interest Entities

Introduction and background

GAAP treatment of special-purpose entities

Problems in past practice

FASB's response to Enron


Example of expected variability of cash flows

Initial determination of VIE status

Determination and redetermination of whether an interest holder is the primary beneficiary

Related-party considerations in determining the primary beneficiary

Reconsideration of VIE status

Consolidation requirements

Initial measurement with common control

Initial measurement absent common control

Example of consolidation of a VIE

Example of an implicit variable interest

Variable interest in “silos”

Synthetic leases

Example of application of ASC 810-10-25 to a synthetic lease

Changing or eliminating differences in fiscal year-end

Partnerships and similar entities

General Partnerships

Limited partnerships

Limited liability companies that maintain a specific ownership account for each investor

Limited liability companies that are functionally equivalent to corporations (“analogous entities”)

Display in the reporting entity's financial statements when the investee is not a corporation

Other Sources



ASC 810, Consolidations, consists of three subtopics:

  • ASC 810-10, Overall, which has three subsections:
    • General
    • Variable Interest Entities

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