Accounting and reporting for private companies continues to evolve -- both through the efforts of the Private Company Council (PCC) and new guidance from the FASB.
4) Applying Variable Interest Entity Guidance to Common Control Leasing Arrangements (ASU No. 2014-07) provides private companies with an exemption from applying the variable interest entity (VIE) consolidation model to an affiliate from whom the private company leases an asset. Private companies that elect the alternative would not consolidate a qualifying VIE, but instead would account for the lease with the VIE (as either capital or operating) and account for any executory contracts between the lessee and lessor (that would have been eliminated if the VIE was consolidated). For more information, refer to our 2015 Private Company Reporter
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