Question

Which of the following does not accurately inform about a variable interest entity (VIE)?

Multiple Choice

• A variable interest entity may take many forms including corporations and partnerships.

• In pre-codification literature, a variable interest entity was referred to as a Special Purpose Entity.

• The power to direct the activities of the VIE that most significantly impact the VIE’s eco­nomic performance is the definition of a controlling financial interest.

• There are 2 criteria for determining if a company has a controlling financial interest in a variable interest entity.

Answer 1