Understanding the Consolidation of Variable Interest Entity Rules
This course presents FASB Interpretation No. 46R – Consolidation of Variable Entities-An Interpretation of ARB No. 51 in a comprehensible format. Following the review of the old rules for consolidation of special purpose entities (SPEs) and the background on consolidations are the general rules of Interpretation No. 46R. These include the application of the Interpretation and the special exemptions from the Interpretation. The basic rules of Interpretation No. 46R, which include three requirements, are covered in complete detail throughout the remaining course material.

Course Publication Date: September 28, 2015

This course is available with NO ADDITIONAL FEE if you have an active self study membership or can be purchased for $120.00!

Author:Steven Fustolo
Recommended CPE:12.00
Delivery Method:Self Study
Level of Knowledge:Overview
Prerequisites:General understanding of accounting
Advanced Preparation:None
Recommended Field of Study:Accounting
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Learning Objectives
  • Indicate when to use consolidations vs. combined statements.
  • Identify a variable interest entity.
  • Identify the four exemptions from FIN 46R’s application.
  • Identify the three requirements for applying FIN 46R.
  • Differentiate between the qualitative and quantitative methods to demonstrate sufficiency of equity.
  • Indicate when an entity is a VIE.
  • Recognize who must perform the VIE test and when VIE status must be reconsidered.
  • Recognize when a company has attempted to abuse the reconsideration loophole.
  • Identify those parties that hold variable interests in the VIE.
  • Identify a variable interest.
  • Differentiate types of variable interests and their variability.
  • Identify a primary beneficiary.
  • Recognize when lessees should consolidate a lessor.
  • Identify when there is an implicit variable interest.
  • Identify the initial test for consolidation using the look-back approach.
  • Identify the initial test for consolidation as of the implementation date.
  • Indicate how to avoid the consolidation rules under FIN 46R.

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