Variable
Interest Entities (VIE’s) ØEstablished as a separate business
structure
vTrust
vJoint
Venture
vPartnership
vCorporation
ØFrequently has neither independent
management nor employees
ØTypical purposes
Intra-Entity
Debt Transactions - Debt Acquired from Outside ØThe acquired debt must be treated
as if it has been extinguished.
ØAny related gain
or loss related to this “early
extinguishment of debt” must be immediately recognized by the consolidated
entity.
ØSubsequent
payment of principal or interest is treated
as a cash
transfer. |
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