Question: When applying the variable interest consolidation model ( and assume the reporting company has a variable interest in the legal entity ) , if the

When applying the variable interest consolidation model (and assume the reporting company has a variable interest in the legal entity), if the analysis indicates the legal entity qualifies for the business-related scope exception (short-cut), this means
None is correct.
the reporting company need not consolidate the legal entity.
no further analysis is required, because, conclusively, the reporting company must consolidate the legal entity.
the reporting company should account for the legal entity using the costmethod.
the reporting company should next consider the (potential) need to consolidate the legal entity using the voting-interest model.

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