Researching Accounting Standards
To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications.
In this chapter, we have discussed off balance sheet financing and recent changes in the accounting for one of the more common methods of off balance sheet financing, variable interest entities. For this case, we will use Interpretation 46(R), “Consolidation of
Variable Interest Entities—An Interpretation of ARB No. 51. Open FIN 46(R).
1. Read paragraph 2. What does the term variable interests mean?
2. Read paragraph 23. What additional disclosure is required by the primary beneficiary of a variable interest entity?