Business Combinations

Question 1

When can private companies choose not to apply VIE accounting?

Answer 1

1. Both the lessee (private company) and lessor are under common control
2. The lessee (private company) has a lease arrangement with the lessor
3. The majority of activities between the lessee and lessor are related to leasing activities AND
4. Guarantees/collateral provided by the lessee for the lessor are less in value than the asset leased by the lessee.