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FASB Interpretation No. 46: Assessing the Impact
This is the first of a two-part article
In a culmination of a project begun in the wake of disclosures concerning Enron Corporations' use of special-purpose entities (SPEs), the Financial Accounting Standards Board (FASB) issued its long-anticipated interpretation of ARB No. 51, Consolidated Financial Statements, and FASB Statement No. 94, Consolidation of All Majority-Owned Subsidiaries, on January 17, 2003.
ARB 51 and Statement 94 require the preparation of consolidated financial statements when one entity has a controlling financial interest in another entity. Usually a controlling financial interest is established when an investor has a majority voting interest in an investee. However, since most SPEs are established to fulfill a single function, determining whether a controlling financial interest exists through voting control is often difficult since there are typically only limited matters on which the SPE investors are able to vote. FASB Interpretation No. 46, Consolidation of Variable Interest Entities, interprets the phrase controlling financial interest to resolve the difficulty involved with identifying control of SPEs based on voting interests. FIN 46 supersedes various Emerging Issues Task Force (EITF) consensuses and SEC staff pronouncements addressing SPE consolidation issues and creates a new model for determining when SPEs (which under FIN 46 are referred to as variable interest entities, or VIEs) should be consolidated that focuses on ownership of variable interests issued by the entity.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?