The consolidation framework – Getting started

Jun 4, 2024

This podcast delves into consolidation accounting, focusing on the variable interest entity model and voting interest entity model. They discuss consolidation scope exceptions, including VIE model scope exceptions. The hosts provide insights on complexities, historical evolution, and disparities in consolidation frameworks under US GAAP and IFRS. Special emphasis is placed on understanding scope exceptions in VIE accounting and finding the balance in preparation for the consolidation framework.

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Intro

00:00 • 2min

Demystifying Consolidation Frameworks in Accounting Standards

02:18 • 2min

Evolution of Accounting Consolidation Frameworks

03:57 • 7min

Exploring Differences in Consolidation Models: US GAAP vs. IFRS

10:42 • 2min

Evolution of Accounting Models and Introduction of the VI Model

12:28 • 11min

Understanding Scope Exceptions in VIE Accounting

23:06 • 15min

Finding the Balance in Preparation for the Consolidation Framework

37:55 • 3min

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We kick off our miniseries on consolidation accounting with an overview of the consolidation models and lay the foundation to go deeper into the variable interest entity model in the next two episodes.

In this episode, we discuss:

02:59 - Background on the two consolidation models
12:54 - The overall consolidation framework
14:20 - The variable interest entity model
20:25 - The voting interest entity model
23:13 - Consolidation scope exceptions
28:13 - VIE model scope exceptions

For more information on this topic, read chapter 1 of our Consolidation guide. Additionally, follow this podcast on your favorite podcast app for more episodes.

Matt Sabatini is a partner in PwC's National Office who helps clients and engagement teams navigate the accounting and financial reporting for complex transactions. He specializes in the accounting for M&A, consolidations, corporate reorganizations, recapitalizations, joint ventures, and other investments.

Alexander Martin is a partner in PwC's Deals practice with over a decade of deals experience, helping clients solve complex accounting, financial reporting, and other business issues that arise from transaction-driven events such as mergers and acquisitions, divestitures, and capital raises.

Heather Horn is the PwC National Office Sustainability & Thought Leader, responsible for developing our communications strategy and conveying firm positions on accounting, financial reporting, and sustainability matters. In addition, she is part of PwC’s global sustainability leadership team, developing interpretive guidance and consulting with companies as they transition from voluntary to mandatory sustainability reporting. She is also the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series.

Transcripts available upon request for individuals who may need a disability-related accommodation. Please send requests to us_podcast@pwc.com.