ACCT 5130 – Advanced Financial Accounting

As we discussed in class, the evolution of variable interest entities and how they are accounted for continues.  These changes will be the focal point of your paper.  The idea is to have your research the accounting literature and then explain what has changed.  You can go straight to the Accounting Standards Updates on the FASB website for this assignment, but I suggest you supplement your reading with implementation or evaluations of each ASU from write-ups you can typically find with national firms.  Deloitte, PWC, E&Y, KPMG, BDO, etc.


Don't use plagiarized sources. Get Your Custom Essay on
ACCT 5130 – Advanced Financial Accounting
Get a plagiarism free paper Just from $13/Page
Order Essay

As we discussed, the primary accounting standard that addresses consolidations (including variable interest entities) is ASC 810.  I have included the history below for your reference.  ARB 51, FIN 46(R) and SFAS 167 have been codified into ASC 810.  The 4 noted accounting standards updates (ASU) are amendments to ASC 810.  Each of these have been provided for you.  As you read through them, you will see several flow charts/decision trees as to when to consolidate and when to not.  Not looking for diagrams in this paper, but those are good visual aids for understanding how the decision is made as to whether or not to consolidate.


Accounting Standard References:

  • ARB 51, Consolidated Financial Statements
  • FIN 46(R), Consolidation of Variable Interest Entities
  • SFAS 167, Amendments to FIN 46(R)
  • ASU No. 2014-7 Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements – a consensus of the Private Company Council
  • ASU No. 2015-02 Consolidation (Topic 810): Amendments to the Consolidation Analysis
  • ASU No. 2016-17 Consolidation (Topic 810): Interests Held Through Related Parties that are Under Common Control
  • ASU No. 2018-17 Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities




  1. For each ASU, provide a summary of the document. You can follow the general flow of the ASU documents.


  1. Why is the FASB issuing this accounting standards update?
  2. Who is affected by the amendments in the update?
  3. What are the main provisions?
  4. How do the main provisions differ from previous GAAP and why are they an improvement?
  5. When was it effective? Are the dates different for public versus private companies?


  1. To demonstrate that you understand the most recent developments, read the following scenario and tell me what you would recommend:




Warhawk, Inc. is a privately held company with a related party owned by the same owners, but not directly.  The sole purpose of the company is to own real estate that is exclusively leased by Warhawk, Inc.  The real estate company has been previously identified as a variable interest entity for which Warhawk, Inc. is the primary beneficiary and has been consolidated for a number of years.  The owners would like to not consolidate this entity and understand that possibly under new accounting guidance that they may not have to.  Using the standards we have just looked at, how would you advise them?


  1. Lastly, tell me what you think. Why are these improvements or are they actually?  We talked about the difficulties encountered and the pushback on the part of financial statement preparers.  Do these provide the requested relief?




Master Homework
Order Now And Get A 20% Discount!
Pages (550 words)
Approximate price: -

Advantages of using our writing services

Custom Writing From Scratch

All our custom papers are written by qualified writers according to your instructions, thus evading any case of plagiarism. Our team consists of native writers from the USA, Canada, and the Uk, making it convenient for us to find the best to handle your order.

Unlimited Free Revisions

If you feel your paper didn't meet all your requirements, we won't stop till it's perfect. You're entitled to request a free revision within 7 days after we submit your paper.

Quality Writing In Any Format

If you have issues with citing sources and referencing, you need not worry. Our writers are highly knowledgeable in referencing, including APA/MLA/Havard/Chicago/Turabian and all other formatting styles.

Fast Delivery And Adherence To The Deadline

All our custom papers are delivered on time, even the most urgent. If we need more time to perfect your paper, we may contact you via email or phone regarding the deadline extension.

Originality & Security

At Master Homework, your security and privacy is our greatest concern. For this reason, we never share your personal information with third parties. We use several writing tools to ensure your paper is original and free from plagiarism.

24/7 Customer Support

Our agents are online 24 hours a day, 7 days a week, and are always ready to serve you. Feel free to contact us through email or talk to our live agents whenever you need assistance with your order.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work nonstop to see the best client experience.


Flexible Pricing

We offer pocket-friendly prices that coincide with the preferred client's deadline.


Admission help & Client-Writer Contact

Our support team is always ready to ensure vital interaction between you and the writer whenever you need to elaborate on something.


Paper Submission

We deliver our papers early within the stipulated deadlines. We are glad to help you if there should be an occurrence of any alterations required.


Customer Feedback

Your review, positive or negative, is of great concern to us and we take it very seriously. We are, consequently adjusting our policies to ensure the best customer/writer experience.