BDO Knows: Variable Interest Entities - After Adoption of ASU 2015-02

February 2016

The following VIE practice aid is designed to assist entities that have adopted ASU 2015-02 with the consolidation analysis required by ASC 810.  Entities that have not adopted ASU 2015-02 may refer to BDO’s prior VIE practice aid, which was last updated in August 2015. This guide has been updated through February 2016 in light of recent comments by the SEC staff and related development at the FASB.  Certain clarifications regarding kick-out and participating rights were also made.

Users of this practice aid are encouraged to follow the steps outlined in the flowchart to apply the VIE consolidation criteria required by US GAAP during their initial assessment of an entity or during any subsequent reconsideration. Note that the discussion in Section II, which follows the flowchart, clarifies only some aspects of the steps presented in the flowchart. In that regard, the flowchart is not a substitute for US GAAP and users should ensure any conclusions reached are consistent with the FASB’s Accounting Standards Codification.