Under U.S. GAAP, there are two primary consolidation models: (1) the voting interest entity model and (2) the variable interest entity (VIE) model. Both require the reporting entity to identify whether it has a “controlling financial interest” in a legal entity and must therefore consolidate the legal entity. This requirement is not limited to legal entities that are VIEs — a reporting entity must consolidate any legal entity in which it has a controlling financial interest.
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