Special Purpose Vehicle

(redirected from Special-Purpose Entities)

Special Purpose Vehicle

A subsidiary of a company that attempts to isolate risk from the parent company by maintaining its assets and liabilities on a completely separate balance sheet. It can be used as a counterparty in swap transactions, or the parent company can finance a project through an SPV that would put the parent company in danger of bankruptcy if the project does not perform well. During the Enron scandal, SPVs developed notoriety because Enron hid much of its debt in SPVs.
References in periodicals archive ?
It charters, regulates and examines the 95 banks, associations, service corporations and special-purpose entities of the Farm Credit System, which makes loans to agricultural producers and their cooperatives nationwide.
FASB published standards that change the way entities account for securitizations and special-purpose entities. Both standards will require new disclosures.
46[R], which both change the way entities account for securitizations and special-purpose entities.
46(R)," change the way entities account for securitizations and special-purpose entities. The FASB says the new standards will impact financial institution balance sheets beginning in 2010 and that the impact of the new standards has been taken into account by regulators in the recent financial institution "stress tests."
The Enron audit committee approved off-balance sheet special-purpose entities that clearly created a conflict of interest between certain members of management and the company.
The final regulations provide a safe harbor for special-purpose entities for single projects, and permit these entities to meet the "active conduct of a construction trade or business" requirement.
"Through the SPE Looking Glass: Improving the Transparency of Special-Purpose Entities," For the Record, Deloitte & Touche, Wilton Connecticut, May/June, 2002.
96-21, Implementation Issues in Accounting for Leasing Transactions involving Special-Purpose Entities; EITF Topic No.
Otherwise, application of Interpretation 46R (or Interpretation 46) is required in financial statements of public entities that have interests in structures that are commonly referred to as special-purpose entities for periods ending after Dec.
In 2001 Rohr transferred some $762 million of volatile, troubled or underperforming loans and venture capital investments to three special-purpose entities, which kept them off the company's balance sheet, thereby inflating earnings.
Put together by the office of the chief accountant, the report looks at off-balance-sheet arrangements, special-purpose entities (SPE), and related issues.
In addition, certain special-purpose entities (SPEs) may be required for a return, but not for GAAP purposes.

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