SISTEMA DE INVENTARIOS PARA CADA REFERENCIA

Differences in consolidation can arise due to:

• Differences in how economic benefits are evaluated when the consolida- tion assessment considers more than just voting rights (i.e., differences in methodology)

• Specific differences or exceptions such as:

- The consideration of variable interests

- Concepts of de facto control

- How potential voting rights are evaluated

- Guidance related to de facto agents, etc.

- Reconsideration events

All consolidation decisions are evaluated first under the VIE model.

US GAAP requires an entity with a vari- able interest in a VIE to qualitatively assess the determination of the primary beneficiary of a VIE.

In applying the qualitative model an entity is deemed to have a controlling financial interest if it meets both of the following criteria:

• Power to direct activities of the VIE that most significantly impact the VIEs economic performance (power criterion)

• Obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE (losses/benefits criterion)

In assessing whether an enterprise has a controlling financial interest in an entity, it should consider the entity’s purpose and design, including the risks that the entity was designed to create and pass through to its variable interest holders. Only one enterprise, if any, is expected to be identified as the primary benefi- ciary of a VIE. Although more than one enterprise could meet the losses/benefits criterion, only one enterprise, if any, will have the power to direct the activities of a VIE that most significantly impacts the entity’s economic performance.

IFRS focuses on the concept of control in determining whether a parent-subsid- iary relationship exists. Control is the parent’s ability to govern the financial and operating policies of a subsidiary to obtain benefits. Control is presumed to exist when a parent owns, directly or indirectly, more than 50 percent of an entity’s voting power.

IFRS specifically requires potential voting rights to be assessed. Instruments that are currently exercisable or convertible are included in the assessment, with no requirement to assess whether exercise is economically reasonable (provided such rights have economic substance). Control also exists when a parent owns half or less of the voting power but has legal or contractual rights to control the majority of the entity’s voting power or board of directors.

In rare circumstances, a parent could also have control over an entity in circumstances where it holds less than 50 percent of the voting rights of an entity and lacks legal or contractual rights by which to control the majority of the entity’s voting power or board of directors (de facto control). An example of de facto control is when a major shareholder holds an investment in an entity with an otherwise dispersed public shareholding. The assertion of de facto control is evaluated on the basis of all relevant facts and circumstances, including the legal and regulatory envi- ronment, the nature of the capital market and the ability of the majority owners of

Consolidation model (continued) Increased skepticism should be given to situations in which an enterprise’s economic interest in a VIE is dispropor- tionately greater than its stated power to direct the activities of a VIE that most significantly impact the entity’s economic performance. As the level of disparity increases, the level of skepticism about an enterprise’s lack of power is expected to increase.

US GAAP also includes specific guid- ance on interests held by related parties. A related-party group includes the reporting entity’s related parties and de facto agents (e.g., close business advisers, partners, employees, etc.) whose actions are likely to be influenced or controlled by the reporting entity. Individual parties within a related party group (including de facto agency rela- tionships) are required to first separately consider whether they meet both the power and losses/benefits criteria. If one party within the related party group meets both criteria, it is the primary beneficiary of the VIE. If no party within the related party group on its own meets both criteria, the determination of the primary beneficiary within the related party group is based on an analysis of the facts and circumstances with the objective of determining which party is most closely associated with the VIE.

IFRS does not address the impact of related parties and de facto agents. There is no concept of a trigger event under IFRS.

Control may exist even in cases where an entity owns little or none of a special- purpose entity’s (SPEs) equity. The appli- cation of the control concept requires, in each case, judgment in the context of all relevant factors.

IFRS does not provide explicit guid- ance on silos. However, it does create an obligation to consider whether a corporation, trust, partnership or other unincorporated entity has been created to accomplish a narrow and well-defined objective. The governing document of such entities may impose strict and sometimes permanent limits on the decision-making ability of the board, trustees, etc. IFRS requires the consid- eration of substance over form and discrete activities within a much larger operating entity to fall within its scope. When an SPE is identified within a larger entity (including a non-SPE), the SPE’s economic risks, rewards, and design are assessed in the same manner as with any legal entity.

Consolidation model (continued) Determination of whether an entity is a VIE gets reconsidered either when a specific reconsideration event occurs or, in the case of a voting interest entity, when voting interests or rights change. However, the determination of a VIE’s primary beneficiary is an ongoing assessment.

While US GAAP applies to legal struc- tures, the FASB has included guidance to address circumstances in which an entity with a variable interest shall treat a portion of the entity as a separate VIE if specific assets or activities (a silo) are essentially the only source of payment for specified liabilities or specified other interests. A party that holds a variable interest in the silo then assesses whether it is the silo’s primary beneficiary. The key distinction is that the US GAAP silo guidance applies only when the larger entity is a VIE.

All other entities are evaluated under the voting interest model. Unlike IFRS, only actual voting rights are considered. Under the voting interest model, control can be direct or indirect. In certain unusual circumstances, control may exist with less than 50 percent owner- ship, when contractually supported. The concept is referred to as effective control.

When control of an SPE is not apparent, IFRS requires evaluation of every entity— based on the entity’s characteristics as a whole—to determine the controlling party. The concept of economic benefit or risk is just one part of the analysis. Other factors considered in the evalua- tion are the entity’s design (e.g., auto- pilot), the nature of the entity’s activities, and the entity’s governance.

The substance of the arrangement would be considered in order to decide the controlling party for IFRS purposes.