Which of the following represents the ultimate action required for treatment of a variable interest entity?
A)Consolidation
B)Equity method
C)Pooling method
D)Elimination

Question

Quizplus · Accepted Answer

The ultimate action required for treatment of a variable interest entity is consolidation. This involves including the VIE's financial statements with those of the primary beneficiary, as the primary beneficiary is considered to have control over the VIE. The equity method, pooling method, and elimination are alternative methods of accounting for investments but are not appropriate for the treatment of a VIE.

Which of the Following Represents the Ultimate Action Required for Treatment