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The SEC staff continues to ask registrants to:
  • clarify how they determined whether they were or were not the primary beneficiary of a variable interest entity (VIE); and
  • provide disclosures required by ASC 810 for consolidated entities that were determined to be a VIE.
Comment Examples
Guidance references
  • It appears that you have investments in affiliates that are 100% owned and accounted for under the equity method of accounting. Please tell us how you determined you are not required to consolidate these affiliates in accordance with ASC 810. To the extent you have determined you are not the primary beneficiary, please tell us how you arrived at that conclusion.
  • We note that you consolidate your joint venture, which is a variable interest entity in which you are the primary beneficiary. Please provide us with your detailed analysis discussing your basis in consolidating the joint venture, and cite the accounting literature relied upon.
  • We note that substantially all of your consolidated affiliates are considered variable interest entities; however, we do not see where you have provided the disclosures required by ASC 810-10-45-25 and ASC 810-10-50-3. Please tell us how you considered disclosure of the nature of any restrictions on the consolidated VIE's assets and on the settlement of its liabilities reported in the statement of financial position, including the carrying amounts of such assets and liabilities, or tell us why this information is not required.
  • Considering that you hold variable interests in certain VIEs but are not their respective primary beneficiary, please disclose the methodology for your determination, including significant judgments and assumptions, as well as other required information pursuant to ASC 810-10-50-5A.

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