Changes in accounting and auditing for consolidation of variable interest entities

Abstract

AbstractIn 2009, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 167 (ASC 810), which broadens the number of entities that will consolidate formerly unconsolidated off‐balance‐sheet assets and liabilities and otherwise changes greatly the framework for consolidated financial statements. Many entities had used qualifying special purpose entities and other vehicles to prevent them from applying the consolidation provisions of Financial Interpretation No. 46 (Revised) (FIN 46(R)), Consolidation of Variable Interest Entities. This article summarizes the provisions of the new standard and provides examples of its application in order to help practitioners implement these provisions and provide guidance to companies and clients. © 2012 Wiley Periodicals, Inc.