New Accounting Alternative for Construction Companies with VIEs

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Variable Interest Entity Evaluation Guidance Issued for Companies with Common Control Leasing Agreements

It is common for construction company owners to own commercial real estate that is leased back to their companies as office and warehouse space. These types of relationships are beneficial for tax and estate planning, but they can result in a variable interest entity (VIE) consolidation that requires some complex accounting strategies.

There are varying types of events or transactions that may occur between a construction company and another commonly controlled entity that may result in application of FASB ASC 810-10-05 for consolidation of a VIE. This guidance requires …read more

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