ASC

Concept

primary beneficiary

Referenced in 3 subtopics across 1 area.

Broad Transactions3

  1. 810-10Overall810 Consolidation

    ASC 810-10 sets out the pervasive framework for determining whether one reporting entity must consolidate another legal entity, and it is organized into three Subsections: General (voting interest model), Variable Interest Entities (VIE model), and Consolidation of Entities Controlled by Contract. Consolidation is required when a reporting entity has a "controlling financial interest" — usually ownership of a majority voting interest (or, for limited partnerships, a majority of kick-out rights through voting interests) under the General Subsections, or, for a VIE, both power over the activities that most significantly impact the VIE's economic performance and exposure to potentially significant losses/benefits. A reporting entity must first test whether the other entity is a VIE (810-10-15-14); only if it is not does the voting-interest or contractual-control analysis apply.

  2. 810-942Financial Services—Depository and Lending810 Consolidation

    This Subtopic tells bank holding companies how to present trust-preferred securities structures. Because the sponsoring bank holds no variable interest in the special-purpose trust, it cannot be the trust's primary beneficiary and does not consolidate it (810-942-55-2). Instead, the bank reports the subordinated debentures it issued to the trust as debt on its balance sheet, and accounts for its holding of the trust's common securities under the equity method (810-942-45-1).

  3. 810-952Franchisors810 Consolidation

    ASC 810-952 was the franchisor-specific consolidation guidance within the Consolidation topic, addressing when a franchisor should consolidate a franchisee entity (typically under the variable interest entity model). Every paragraph in the subtopic — the overview, scope, and implementation guidance and illustrations — was superseded by Accounting Standards Update No. 2009-17. As a result, the subtopic contains no operative guidance; franchisors apply the general consolidation model in ASC 810-10.