SPE: consolidation method

does SPE use consolidation method? Thanks.


SPE doesn’t use Consolidation. Parent (Primary benefeciary) who needs to put the SPE on its books - uses Consolidation.

you don’t consolidate if it meets certain requiremens. I think IFRS says you have to consolidate if “in substance” you control it. GAAP is similar i think

Under IFRS it is is consolidated into the parent if it meets certain criteria relating to the parent having decision making rights, or if it receives most of the benefits or has most of the risks. Under US GAAP I think all SPE’s or VIE’s are consolidated into the parent, unless they’re a QSPE. If they fulfill the QSPE criteria they don’t have to be consolidated. (As far as I can remember).

QSPE are no longer allowed.

QSPE’s went extinct effective Jan 1 2010. WHich is why i doubt the CFAI will ask a question on this. The accouting rules changed after their curriculum was released