Lavalle Corporation creates a separate legal entity that acquires equipment and leases it to Lavalle. Lavalle does not own any of the entity's stock. Which statement is false?
A) Lavalle does not consolidate the entity because it doesn't have any ownership interests in it.
B) The entity is a variable interest entity if it cannot obtain financing on its own.
C) Lavalle consolidates the entity if the entity is a variable interest entity and Lavalle absorbs the entity's risks and rewards.
D) Lavalle will not consolidate the entity if it is not a variable interest entity.
Correct Answer:
Verified
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