Deloitte
Accounting Research Tool
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Appendix C — Expected Losses and Expected Residual Returns

C.5 Example of a Calculation of Expected Losses and Expected Residual Returns

C.5 Example of a Calculation of Expected Losses and Expected Residual Returns

Below is an example of a calculation of expected losses and expected residual returns. As noted in Section C.1, a reporting entity is generally not required to calculate expected losses and expected residual returns in performing a consolidation analysis under the VIE model. However, in this example, it is assumed that the reporting entity did not qualify for an exception to the VIE subsections of ASC 810-10 and that because a qualitative assessment under ASC 810-10-15-14(a) was inconclusive, the reporting entity calculated expected losses and expected residual returns in evaluating whether the legal entity is a VIE.