Question 1
Is the Enterprise a VIE as defined in the Codification Master Glossary? If so, what criteria cause it to be deemed a VIE? Assume that (1) the Enterprise does not qualify for any scope exceptions and (2) the equity investment by the Nominee Shareholders in the Enterprise represents equity investment at risk.
Question 2
If the Enterprise is deemed to be a VIE, would the WFOE (excluding any related party or de facto agency relationships) consolidate the Enterprise?
Additional Facts 1
The WFOE and the Enterprise enter into an additional contractual agreement:
Power of Attorney — The WFOE and Nominee Shareholders enter into an agreement that provides the WFOE with irrevocable power of attorney (POA) over the Nominee Shareholders with regard to their interests in the Enterprise. Pursuant to the POA, the Nominee Shareholders assign the WFOE (or any person designated by WFOE) as their attorney-in-fact to vote on their behalf on all matters of the Enterprise requiring shareholder approval under PRC laws and regulations as well as all matters requiring a vote by the board of directors. This ensures that the Nominee Shareholders will act at the direction of and in the best interest of the WFOE.
Question 3
What impact, if any, does the POA agreement have on the conclusion reached in Question 2?
IFRS Addendum
Does the accounting analysis or conclusion change for each of the questions above when analyzed in accordance with IFRS?

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