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Losses and/or benefits

Qualitative analysis

Facts and circumstances that considers the terms and characteristics of the variable interests, the VIE, and the company

Excludes non-variable interest involvement in the VIE

Potential criterion excludes probability as a factor

Multiple variable interest holders could meet this criterion, but only one (or none) will meet the power criterion

Look at improbable scenarios that could be significant



Percentage of class interest held

Purpose and design of the legal entity. What risks was the entity designed to create and pass along to variable interest holders?

Terms and characteristics of the interest held…senior versus subordinated, fixed return versus unlimited return

Purpose for holding the interest…retained residual tranche, shift exposure/limit losses, shift benefits, isolate bad/good assets, marketing materials may help reveal reasons


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