Accounting of financial institution

• Q1 Accounting for Securitization under SFAS No. 140 (2000) is a limited attempt to describe complex transactions that are structured to yield desired economic and accounting outcomes. This accounting raises three issues for users of financial reports. State these three issues.
• Q2 The vast majority of SPEs are VIEs, however VIEs need not be SPEs. Explain this statement. Also state the conditions that define an entity as VIE.
• Q3 The sensitivity approach requires that the firm provide an estimate of the loss of value, earnings, or cash flow caused by a specific adverse movement in each market price or rate. Sensitivity Approach also has some strength and some weakness. Discuss the strength and weakness of Sensitivity Approach.

Requirements: 1 or 2 pages