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What types of entities are referred to as special-purpose entities, and how have they been generally used?

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I’m working on a accounting discussion question and need a sample draft to help me learn.

Select three of the following questions for your initial response.  Copy and paste the questions you decide to answer in bold type with your answers directly underneath the questions. 

  1. How does a variable interest entity differ from a traditional corporate business entity?  Be specific.
  2. What major criteria must be met before a company is consolidated?  Again, be specific, referring to the codification where necessary.
  3. What types of entities are referred to as special-purpose entities, and how have they been generally used?
  4. What is meant by indirect control?  Give an illustration or an example.
  5. Explain the difference between consolidated and combined financial statements.  Be specific and explain, too, some of the differences.
  6. What is meant by a noncontrolling interest in a subsidiary?
  7. What must be done if the fiscal periods of the parent and the subsidiary are not the same?
  8. When is consolidation considered inappropriate even though the parent company holds a majority of the voting common shares of another company?
  9. Are consolidated financial statements likely to be more useful to the creditors of the parent company or the creditors of the subsidiaries?  Why or why not?
  10. What characteristics are normally examined in determining whether a company is a primary beneficiary of a variable interest entity?

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