With regard to a variable interest entity (VIE),Ann Company may meet the following two conditions: Condition I
Ann Company has the power to direct VIE activities that significantly impact VIE's economic performance.
Condition II
Ann Company has an obligation to absorb losses and/or a right to receive significant benefits from the VIE.
Ann Company must consolidate a VIE if

Question

Quizplus · Accepted Answer

According to the guidance provided in ASC 810, both Condition I (power to direct VIE activities) and Condition II (obligation to absorb losses or right to receive significant benefits) must be met for a company to be required to consolidate a VIE. Therefore, the best choice is D, both Condition I and Condition II are met.

With Regard to a Variable Interest Entity (VIE),Ann Company May