What is a variable interest entity China?

Register. Under this structure, a Chinese company sets up an offshore entity for overseas listing purposes that allows foreign investors to buy into the stock. The arrangement was designed to help skirt Chinese rules restricting foreign investment in a number of sensitive industries such as media and telecommunications …

What FAS 167?

FAS 167 means Financial Accounting Standards Board Statement of Financial Accounting Standards No. 167, as amended, modified or supplemented from time to time.

What makes a company a variable interest entity?

A variable interest entity (VIE) refers to a legal business structure in which an investor has a controlling interest despite not having a majority of voting rights. Characteristics include a structure where equity investors do not have sufficient resources to support the ongoing operating needs of the business.

Is NIO a variable interest entity?

NIO Inc. is a Cayman Islands holding company with no equity ownership in our consolidated variable interest entity. We conduct our operations in China through (i) our PRC subsidiaries and (ii) our consolidated variable interest entity with which we have maintained contractual arrangements.

What is a variable interest entity example?

Examples of variable interests include operating leases, service contracts, debt instruments and guarantees. For example, a public company may provide decision-making services to another entity.

Is NIO undervalued?

For perspective, Nio’s Q1 2022 guidance implies a little over 10,000 deliveries for March – about 35% higher year-over-year, although it marks a decline from December 2021 levels. We still think Nio stock remains undervalued.

Is Alibaba a VIE?

For example, Alibaba, the largest retailer and e-commerce company in China, uses a VIE structure allowing U.S. investors to purchase VIE shares in Alibaba on the New York Stock Exchange (NYSE).

Is NIO variable interest entity?