Again, the results from operations and the financial position of the group remains the same; however, the consolidated presentation of controlling interest in the balance sheet and income statement is often misleading.
Private loan consolidation Like federal consolidation, a private consolidation loan allows you to combine multiple loans into one, and offers the same potential benefits listed above. Choose a variable interest rate loan, which can be a cost-saving option if you plan to pay off your loan relatively quickly. Enjoy the benefits of consolidation, including one simplified monthly bill.However, the interest rate on your new, consolidated loan is not a weighted average of your old loans’ rates. Unlike consolidation, student loan refinancing is only available from private lenders.In these situations, accounting standards are clear that a combined financial statement presentation is likely more meaningful and therefore preferred over a consolidated presentation (ASC 810-55-1b).Nonetheless, we still see practitioners evaluating the real estate and equipment entities as VIEs and consolidating them into the operating company.Student loans have a way of making you feel powerless.
But the truth is, you have more control than you think.
This option doesn’t save you any money, but there are still a few potential benefits: 1.
Fewer bills and payments to keep track of each month. The ability to switch out older, variable rate federal loans for one fixed rate loan, which could protect you from having to pay higher rates in the future if interest rates go up.
For instance, with the advent of FIN 46, many in public and private accounting practice interpreted the new literature as precluding the use of combined financial statement presentation.
In fact, financial statements that were once presented on a combined basis, were often switched to consolidated presentation.
You may not be able to change the fact that you have student loans, but you can make smart decisions about them.