1. The reporting entity, its related parties (all parties identified in paragraph 810-10-25-43, except for de facto agents under paragraph 810-10-25-43(d)(1)), or both participated significantly in the design or …show more content…
The legal entity is designed so that substantially all of its activities either involve or are conducted on behalf of the reporting entity and its related parties.
3. The reporting entity and its related parties provide more than half of the total of the equity, subordinated debt, and other forms of subordinated financial support to the legal entity based on an analysis of the fair values of the interests in the legal entity.
4. The activities of the legal entity are primarily related to securitizations or other forms of asset-backed financings or single-lessee leasing arrangements.
2.) Even though the investment risk is greater than 10% of the total assets for LeaseMed, you still have to demonstrate that the equity is sufficient to permit the legal entity to finance its own activities according to ASC 810-10-25-45a,b,c. LeaseMed does not meet qualification A because it is not able to issue investment grade debt and there is no evidence that it has invested into other similar entities (qualification B). So it seems likely that LeaseMed does not have sufficient equity and will need additional subordinated financial support. This would then continue to variable interest