A good grip on SIC–12 and FIN 46R is crucial if management is to predict the impact that transactions will have on the balance sheet under IFRS and US GAAP.

Caution to non-experts:Special Purpose Entities (SPEs) are one of the most problematic and judgemental areas in accounting today. This publication addresses broad issues - real-life examples are never as straightforward.

This new publication, written by PricewaterhouseCoopers’ experts, looks at the US GAAP and IFRS guidance on the consolidation of special purpose entities (SPEs). It compares the requirements of each framework and highlights their similarities and differences, including examples.

Management needs to be aware of the divergences between SIC–12 and FIN 46R. The market may also be expecting the outcome (on balance sheet or off) to be the same under the two sets of standards. Management should be prepared to explain why the differences arise.

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