Can anyone shed more light on Variable Rate Entities. I believe that if they meet a certain set of criteria, they are considered VRE, but how do you account for them? Equity method? Acquisition method? Proportionate consolidation?
i think you're talking about Variable Interest Entities (VIEs), a type of SPE.....basically if the shareholders of the SPE do not act like regular shareholders, meaning they don't share normally in the upside and downside of the entity, then its a VIE, and must be consolidated by the primary beneficiary. The primary beneficiary is the firm that is exposed to most of the risks or who gets most of the benefits, or both. If the SPE needs the support of something (another entity) then its a VIE and should be consolidated. Anything else?作者: MiniMe7 时间: 2011-7-11 19:32
Yep, VIE is right. Sorry about that. Is a good way to think about the consolidation is that you are accounting for them under the aqusition method, where there is no minority interest and ou own 100%?作者: firat 时间: 2011-7-11 19:32
I've never seen a scenario where the VIE is only partially consolidated, it's always 100%.
