An entity would be considered the primary beneficiary of a variable interest entity (VIE)if the entity

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The primary beneficiary of a variable interest entity (VIE) is considered to be the entity that has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. This is often demonstrated by providing the majority of financial support, especially in scenarios where multiple parties are involved in supporting the VIE financially. Holding a specific percentage of equity interest or voting rights does not necessarily determine the primary beneficiary status under the VIE model.

An Entity Would Be Considered the Primary Beneficiary of a Variable