Wiley GAAP 2019

50ASC 810 CONSOLIDATIONS

PERSPECTIVE AND ISSUES

Subtopics

ASC 810, Consolidations, consists of two subtopics:

• ASC 810-10, Overall, which has three subsections:
  • General
  • Variable Interest Entities, which explains how to identify VIEs and when the reporting entity should consolidate the entity
  • Consolidation of Entities Controlled by Contract, which provides guidance for entities that are not VIEs but are controlled by contract, including physician practices and physician practice management entities.
• ASC 810-30, Research and Development Arrangements, which provides direction on whether and how those arrangements should be consolidated.

Scope and Scope Exceptions

All legal entities are included in the scope of ASC 810. The application to not-for-profit entities is subject to additional guidance in ASC 958-810. (ASC 810-10-15-4 and 15-5) Scope exceptions for ASC 810-10 follow the subsections and breakdown as follows:

• General, applying to all subtopics under ASC 810-10,
• Specific, applying to VIEs, and
• Consolidation of entities controlled by contracts that are not VIEs

Applying the Scope Guidance.

If a reporting entity is within the scope of the VIE Subsections, that entity should apply the VIE guidance first. If not, then the reporting entity should determine whether it has a direct or indirect controlling financial interest. (ASC 810-10-15-3) For legal entities other than limited partnerships, this is defined as more than 50%. There are circumstances where an entity may ...