What was 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 by the Financial Accounting Standards Board (FASB) for Special Purpose Entities (SPEs) was to establish a mechanism that would encourage companies to invest in necessary assets while keeping related debt off their balance sheets. This was intended to help companies manage their financial ratios and maintain a healthier balance sheet appearance.

What Was the Original Motivation by FASB on SPEs