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Scope & Applicability of ASC 810



Are you struggling to navigate the complexities of financial consolidation and compliance with ASC 810? Look no further! Welcome to our comprehensive guide on ASC 810 – Consolidation, where we unravel the intricacies of this vital accounting standard.

What is ASC 810?

ASC 810 is issued by the Financial Accounting Standards Board (FASB) and is a specific Topic under US GAAP which outlines the principles and guidelines of financial consolidation for multiple entities. It provides guidance on how and when; a reporting entity is required to consolidate the financials of the other legal entities over which it has control. ASC 810 also lays down a detailed explanation on what constitutes to be a control, explains the eligibility criteria and exceptions to apply the consolidation models and also elucidates the consolidation models. As per ASC 810, when a legal entity controls other entities, it shall prepare the consolidated financials of all the entities under its control. While preparing the consolidated financials, ASC 810 offers 2 models – Variable Interest Entity (VIE) model and Voting Interest Entity (VOE) model.

When the reporting entity meets the characteristics of VIE and does not meet the scope exception of ASC 810, then it prepares its consolidated financials under VIE model. When a reporting entity does not meet the scope exception of ASC 810 but meets the exception of the VIE model, it prepares the consolidated financials under VOE model.

Why is it Important?

Consolidation, as guided by ASC 810, plays a pivotal role in ensuring the financial statements of entities reflect a comprehensive and transparent view of their financial position and performance. This standard provides clarity on the criteria for determining control, thereby ensuring entities cannot arbitrarily omit controlled subsidiaries or variable interest entities from their financial disclosures. By adhering to ASC 810, Companies not only uphold the integrity and reliability of financial statements but also foster investor confidence by presenting a true picture of their economic substance. Furthermore, the standard prevents potential earnings manipulation, promotes consistent reporting across entities, and reinforces market trust, which is foundational for the stability and credibility of capital markets.

What You’ll Find in Our Knowledge Series:

  • Scope and Applicability of ASC 810: Get an overview of ASC 810 and discover which entities fall within its scope exceptions and exemptions. We’ll give a brief introduction to concepts of VIEs and VOEs, along with the importance of consolidation.


  • Control and Voting Power: We break down the complex consolidation criteria including control, control by contract, and power to direct activities and make decisions. Learn how to assess whether consolidation is required in various scenarios.


  • Variable Interest Entities (VIEs): We will provide you a step-wise guide to use VIE model for consolidation. Whether there exists a variable interest, and whether the entity is a variable interest entity. We have got you covered with everything related to VIE in this section.


  • Consolidation Methods: Explore the different methods of consolidation – the voting interest model and the variable interest entity model. The voting interest model further has different methods like step up acquisition, accounting for NCI, and proportionate consolidation. This section will touch on all the complex transactions.


  • Eliminations, disclosures and other special transactions: We tackle unique challenges such as accounting requirements for intercompany eliminations, consolidation under common control, changes in holding percent, and related party transactions. Uncover the disclosure requirements for consolidated entities. Gain insights into what information needs to be disclosed in financial statements to comply with ASC 810.


  • Differences (IFRS vs US GAAP): We will explain the key differences between ASC 810 and IFRS 10.


Who Should Read This Knowledge Series?

Our ASC 810 guide is a must-read for accounting and finance professionals, business owners, auditors, and anyone involved in financial reporting and consolidation. Whether you’re a seasoned expert or new to the field, our guide offers valuable insights applicable to various levels of expertise.

Get Started

Visit our website [Website URL] to access the first article in our ASC 810 series. Stay tuned as we release new articles covering each aspect of the standard over the coming weeks. This free resource is our contribution to financial knowledge, designed to help you navigate the intricacies of consolidation with confidence.

Stay Updated

Watch this space to receive notifications of new articles and other resources on ASC 810 and other accounting and finance topics.

Don’t let ASC 810 be a mystery any longer! Join us on this enlightening journey as we demystify consolidation standards and empower you with the knowledge you need for financial success.

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