The consolidation framework – Determining the primary beneficiary

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We conclude our miniseries on consolidation accounting with an episode on identifying the primary beneficiary of a VIE, the reporting entity required to consolidate the VIE. In this episode, we discuss:

• 3:15 – Determining which entity should consolidate the VIE
• 6:07 – The primary beneficiary power criterion
• 17:35 – The primary beneficiary economics criterion
• 21:17 – Related party impacts on the VIE model
• 26:00 – Ongoing reassessment of the primary beneficiary

For more information on this topic, read chapter 5 of our Consolidation guide. Also, for an overview of the consolidation framework, listen to the first two episodes in this miniseries, The consolidation framework – Getting started and The consolidation framework – Identifying a VIE. Additionally, follow this podcast on your favorite podcast app for episodes on other topics.
Matt Sabatini is a partner in PwC's National Office who helps clients and engagement teams navigate the accounting and financial reporting for complex transactions. He specializes in the accounting for M&A, consolidations, corporate reorganizations, recapitalizations, joint ventures, and other investments.
Alexander Martin is a partner in PwC's Deals practice with over a decade of deals experience, helping clients solve complex accounting, financial reporting, and other business issues that arise from transaction-driven events such as mergers and acquisitions, divestitures, and capital raises.
Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series.
Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [e-mail].

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1. The consolidation framework – Determining the primary beneficiary (00:00:00)

2. Determining which entity should consolidate the VIE (00:03:15)

3. The primary beneficiary power criterion (00:06:07)

4. The primary beneficiary economics criterion (00:17:35)

5. Related party impacts on the VIE model (00:21:17)

6. Ongoing reassessment of the primary beneficiary (00:26:00)