Question: Joint Projects Recently the IASB has been working to determine how to report variable interest entities on financial statements. Instructions (a) What is a variable

Joint Projects Recently the IASB has been working to determine how to report variable interest entities on financial statements.
Instructions
(a) What is a variable interest entity? Why is the accounting problematic? Provide three examples from various company reports.
(b) Review the IASB project on Consolidation. (The exposure draft issued in December 2008 is available at www.iasb.org.) What is the definition of “control” that is considered being pro- posed? Discuss the issues around the control of a structured entity. Why is it difficult to deter- mine whether or not an entity has control over a variable interest entity? What types of facts and circumstances should be considered in determining control?

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1 A variable interest entity is an entity that is created for a narrow or single purpose involving accessing financing accounts receivable securitizations isolating certain assets from the entity for ... View full answer

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