Which of the following characteristics is not indicative of an enterprise qualifying as a primary beneficiary with a controlling financial interest in a variable interest entity?
A) The power to direct the most significant economic performance activities.
B) The power through voting or similar rights to direct activities, which significantly impact economic performance.
C) The obligation to absorb potentially significant losses of the entity.
D) No ability to make decisions about the entity's activities.
E) The right to receive potentially significant benefits of the entity.

Question

Quizplus · Accepted Answer

A primary beneficiary must have the power to make decisions about the entity's activities, which significantly impact its economic performance. Having no ability to make such decisions would disqualify an enterprise from being a primary beneficiary.

Which of the Following Characteristics Is Not Indicative of an Enterprise