Consolidated Financial Statements and Variable Interest Entities   1. Per the textbook, some investors (e.g., Warren Buffet) have contended that the U.S. GAAP treatment undervalued the parent’s investment carrying value for post-control step acquisitions. Construct one (1) argument in which you provide at least two (2) reasons for the U.S. GAAP treatment of reporting additional investments in subsidiaries when the parent previously established control. Provide support for your rationale.  2. Determine the main characteristics of a variable interest entity (VIE). Evaluate the usefulness to investors of the inclusion of VIEs in the company’s consolidated financial statements. Provide support for your rationale. ...

1. Consolidated Financial Statements and Variable Interest
Entities
1. Per the textbook, some investors (e.g., Warren Buffet) have
contended that the U.S. GAAP treatment undervalued the
parent’s investment carrying value for post-control step
acquisitions. Construct one (1) argument in which you provide
at least two (2) reasons for the U.S. GAAP treatment of
reporting additional investments in subsidiaries when the parent
previously established control. Provide support for your
rationale.
2. Determine the main characteristics of a variable interest
entity (VIE). Evaluate the usefulness to investors of the
inclusion of VIEs in the company’s consolidated financial
statements. Provide support for your rationale.