ACC 703 Lecture Notes - Deferred Income, Credit Risk, Equity Method
15 Apr 2013
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An entity set up by a sponsor to accomplish a very specific and limited business activity. Assets transferred to them by their sponsors, spe can often secure lower cost debt financing for the sponsor because credit risk is limited to the spe asset. The debt proceeds, spe can then pay the sponsor for the transferred assets. Ifrs 10 requires spe to consolidate as long as they meet the definition of control under ifrs 10: Two types: joint operation (jo) & joint venture (jv) Each contributes the use of assets or resources to the new activity but retains title to and control of these assets and resources. Have joint control of the arrangement and have rights to the asses, and obligations for the liabilities relating to the arrangement. Ifrs 11 allows jo for proportional, so basically you report your share of assets, liabilities, revenue and expense of the jo.
