What is the original motivation by FASB on SPEs?
A)To establish a mechanism to encourage companies to invest in needed assets while keeping related debt of its books.
B)To keep the large amount of debt off the books.
C)To sell non-producing assets to the SPE.
D)To select which assets to sell to the SPEs affecting the gain.

Question

Quizplus · Accepted Answer

The original motivation of FASB on SPEs was to establish a mechanism that encourages companies to invest in much-needed assets while keeping its related debt off its books. This would help companies to have better financial ratios and credit ratings, which would eventually make it easier for them to obtain financing.

What Is the Original Motivation by FASB on SPEs