Acme, a U.S. company, has a financial relationship with Zeta, but does not own any of its voting stock. When should Acme consolidate Zeta's accounts in its annual report?

Question

Quizplus · Accepted Answer

Acme should consolidate Zeta's accounts in its annual report if Zeta is a variable interest entity (VIE) and Acme is its primary beneficiary. This is because the primary beneficiary of a VIE is required to consolidate the VIE's accounts according to U.S. Generally Accepted Accounting Principles (GAAP).

Acme, a US