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A not-for-profit entity subject to the consolidation rules of ASC 958, and a not-for-profit health care organization subject to the AICPA Audit and Accounting Guide, Health Care Organizations, is exempt from consideration as a potential VIE, unless the NFP serves to circumvent consolidation under the VIE guidance. Additionally, under this exception, a NFP does not have to analyze its relationships with potential VIEs.

Regardless of this exception, a NFP must be included in the related party group of a for-profit reporting entity for purposes of evaluating which variable interest holder is the primary beneficiary. Also, a NFP may hold a variable interest in a potential VIE and should be included in the identification of variable interest holders.

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