Two enterprises, X and Y, own 100% of the stock of JV, a joint venture.All the equity, $10 million, is equity at risk. X and Y have no involvement in the operation or management of JV, which is the responsibility of a third enterprise, Z. Z provides a $90 million loan to JV in exchange for the right to direct all of JV's activities via a management contract.  

JV is expected to be profitable without further financing. Is V a VIE and Why?

Answer rating: 100% (QA)

Yes JV Joint Venture is a Variable Interest Entity VIE A VIE is an entity in which the equity invest... View the full answer