- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 10. Intercorporate Investments
- Subject 6. Variable Interest and Special Purpose Entities
CFA Practice Question
If variable interests predominate over voting interests,
B. The equity investor should consolidate the controlled entity.
C. The financial statements of the entity should not be combined with those of other entities'.
A. The primary beneficiary should consolidate the controlled entity.
B. The equity investor should consolidate the controlled entity.
C. The financial statements of the entity should not be combined with those of other entities'.
Correct Answer: A
In this case the entity is a VIE and therefore subject to consolidation.
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