SPE and bears the risk of loss (Schroeder et al. , 2005). Interpretation no. (R) uses the term variable interest entities (VIE) instead of SPE. Statement no. 167 is a revision to FASB Interpretation no. 46(R), Consolidation of Variable Interest Entities, and changes how a company determines when an entity is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly affect the entitys economic performance.
Statement no. 167 requires companies to provide additional disclosure associated with VIE and changes in exposure connected with the association. Disclosure is required by a company showing how VIE affects the financial statements of the company Oournal of Accountancy, 2009). FASB Statement No. 123: Share-Based Payments provides investors and users of financial statements with more complete and neutral financial information by requiring that the compensation cost relating to share-based payment transactions be recognized in financial statements.
That cost ill be measured based on the fair value of the equity or liability instruments issued. Statement 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans (Financial Accounting Standard Board, 2004). References Deloitte. (2010). IFRS 2 shared-based payment. Retrieved on September