Abstract
A special purpose entity (SPE) or a special purpose vehicle (SPV) is an entity created by a sponsoring/originating entity to accomplish a narrow and well-defined, often temporary, objective. SPEs are widely used in practice, mostly in securitizations and debt financing, but also in leases and project development. An interesting feature of SPEs is that, typically, voting rights do not represent the primary factor in deciding who controls them. Therefore, a new accounting model is needed to establish who controls and who should consolidate SPEs. In this chapter, we cover the main accounting and financial reporting aspects of SPEs under IFRS and US GAAP, and provide examples of typical SPEs used in practice.
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