About special purpose entity

Assignment Help Financial Management

Reference no: EM131859456

1. Which of the following statements about the comprehensive consolidation model under us gaap is true?

a. An evaluation of whether an entity is a voting interest entity is always made prior to consideration of whether the entity is a variable interest entity

b. Only SPEs can qualify as VIEs

c. If certain conditions are met, a VIE will be evaluated for consolidation based on voting interests

d. All of the above are true

2. Which of the following statements is true about a Special Purpose Entity?

a. All SPEs meet the accounting definition of a business

b. The majority of the cash flows from SPE's are reinvested in other assets

c. Some but not all SPEs are also variable interest entities

d. An SPE cannot be bankruptcy remote from its sponsor

Reference no: EM131859456

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