Which statements regarding consolidation of a vie

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Question 1: Which of the following statements regarding consolidation of a VIE with its primary beneficiary is true?

Option 1: The consolidation of a VIE with its primary beneficiary requires the business enterprise to follow a separate process than the one required for consolidations based on voting interests.

Option 2: All intra-entity transactions between the primary beneficiary and the VIE are included in the consolidation.

Option 3: Only intra-entity transactions between the primary beneficiary and the VIE resulting from intra-entity transfers are eliminated in the consolidation.

Option 4: VIEs with controlling interests must include one hundred percent of the primary beneficiary's net income in a consolidation.

Option 5: The allocation of the VIE's net income is based on an analysis of the underlying contractual arrangements between the primary beneficiary and other holders of variable interests.

Reference no: EM132883084

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