The variable interest entity (or VIE) model is the starting place for any company thinking through consolidation. It’s a complex model and a frequent area of confusion. We’re tackling the topic in this episode as Heather Horn is joined by PwC partner Matt Sabatini to discuss what you need to know to make sure you’re getting the VIE model right.

Topics include:

• 0:44 - Definition and scope. Matt explains how VIEs fit in the overall consolidation framework and highlights key scope exceptions. 
• 5:40 - Variable interest. How do you determine if you have a variable interest? Matt explains. 
• 12:38 - Variable interest entity. Matt shares the five characteristics of a VIE and discusses the considerations for each characteristic.
• 21:33 - What’s next? Once you’ve determined that you have a VIE, Matt walks through the determination of the primary beneficiary. 
• 30:31 - Reassessment. The VIE model is not a set-it and forget-it model, periodic reassessment is necessary. Matt explains the specific scenarios that trigger reassessment.   

Matt Sabatini is a partner in PwC's National Office with nearly 20 years of experience helping clients and engagement teams navigate the accounting and financial reporting for complex transactions. He specializes in the accounting for M&A, corporate reorganizations, recapitalizations, joint ventures, and other investments. 

Heather Horn is PwC’s National office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With over 25 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to [email protected].