... sensitivity of those fair values to changes in key assumptions". There is no comprehensive FASB standard on Special Purpose Entity accounting. Most of the guidelines for this accounting are found in various Emerging Issue Task Force guidelines. The EITF guidelines are not standards, but they have significant impact since auditing firms often insist that these guidelines be followed by their clients. A Special Purpose Entity allows "sponsor/originator" companies bearing as much as 90% of the Special Purpose Entity's debt risk to keep that debt off the consolidated balance sheet under U.S. Generally Accepted Accounting Principals. Although many companies have used SPE's to hide debt and inflate cash flows, the majority of SPE's in the world are completely legitimate and serve a vital purpose. Special Purpose Entity accounting arose mostly due to pressures from banks and leasing companies to provide a way to avoid capitalization of special types of leases. Credit enhancements ...

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