Expand
US GAAP and IFRS Accounting Standards both require extensive disclosure about an entity’s involvement in VIEs/structured entities, including those that are not consolidated. The below table includes highlights of the disclosures required for interests, risks, and restrictions under both frameworks. For more on these and other disclosures required under US GAAP, see FSP 10 and FSP 18.
US GAAP
IFRS Accounting Standards
Guidance applies to both nonpublic and public enterprises.
The principal objectives of VIE disclosures are to provide financial statement users with an understanding of the following:
  • Significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement in a VIE
  • The nature of restrictions on a consolidated VIE’s assets and on the settlement of its liabilities reported by an enterprise in its statement of financial position, including the carrying amounts of such assets and liabilities
  • The nature of, and changes in, the risks associated with an enterprise’s involvement with the VIE
  • How an enterprise’s involvement with the VIE affects the enterprise’s financial position, financial performance, and cash flows

The level of disclosure to achieve these objectives may depend on the facts and circumstances surrounding the VIE and the enterprise’s interest in that entity.
Additional detailed disclosure guidance is provided for meeting the objectives described above.
Specific disclosures are required for (1) a primary beneficiary of a VIE and (2) an entity that holds a variable interest in a VIE (but is not the primary beneficiary).
IFRS Accounting Standards have disclosure requirements for interests in subsidiaries, joint arrangements, associates, and unconsolidated structured entities which include the following:
  • Significant judgments and assumptions in determining if an investor has control or joint control over another entity, and the type of joint arrangement
  • The composition of the group and interests that noncontrolling interests have in the group’s activities and cash flows
  • The nature and extent of any significant restrictions on the ability of the investor to access or use assets, and settle liabilities
  • The nature and extent of an investor’s interest in unconsolidated structured entities
  • The nature of, and changes in, the risks associated with an investor’s interest in consolidated and unconsolidated structured entities
  • The nature, extent, and financial effects of an investor's interests in joint arrangements and associates, and the nature of the risks associated with those interests
  • The consequences of changes in ownership interest of a subsidiary that do not result in loss of control
  • The consequences of a loss of control of a subsidiary during the period
An entity is required to consider the level of detail necessary to satisfy the disclosure objectives of enabling users to evaluate the nature and associated risks of its interests, and the effects of those interests on its financial statements.
Additional detailed disclosure guidance is provided for meeting the objectives described above.
If control of a subsidiary is lost, the parent shall disclose the gain or loss, if any, and:
  • Portion of that gain or loss attributable to recognizing any investment retained in former subsidiary at its fair value at date when control is lost
  • Line item(s) in the statement of comprehensive income in which the gain or loss is recognized (if not presented separately in the statement of comprehensive income)
Additional disclosures are required in instances when separate financial statements are prepared for a parent that elects not to prepare consolidated financial statements, or when a parent, venturer with an interest in a jointly controlled entity, or investor in an associate prepares separate financial statements.

PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

Expand Expand
Resize
Tools
Rcl
Add to favorites
Please ensure
that you select
Print Background (colors and images) when printing.
CONTINUE
PwC image modal

This content is copyright protected. It is for your own use only - do not redistribute. These materials were downloaded from PwC's Viewpoint (viewpoint.pwc.com) under license.

Warning 2

✕

Welcome to Viewpoint, the new platform that replaces Inform. Once you have viewed this piece of content, to ensure you can access the content most relevant to you, please confirm your territory.

Viewpoint allows you to save up to 25 favorites.

Consider removing one of your current favorites in order to to add a new one.

Go to favorites

Are you sure you would like to remove this page from your list?

Yes
You are already signed in on another browser or device.
Click Continue if you want to automatically close other logged in sessions and continue. If you want to manually check for other active logged in sessions first, please select Cancel to go back to the previous page.
Need some help? Contact us
signin option menu option suggested option contentmouse option displaycontent option contentpage option relatedlink option prevandafter option trending option searchicon option search option feedback option end slide
✕

Hello and welcome to Viewpoint

Your go-to resource for timely and relevant accounting, auditing, reporting and business insights. Follow along as we demonstrate how to use the site

Before we start.

Choose your preferred language below.