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Accounting


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Virtual Entity


A hypothetical entity that has no legal identity different from that of its parent entity. A virtual entity consists of a distinct set of assets/ liabilities related to a certain group of stakeholders (e.g., investors in a pool). This set has its own accounting, including what relates to revenues, losses, gains, etc.

The rights and obligations related to a pool or a category of stakeholders are isolated and segregated for from those of others’ (whether a corporate entity, i.e., the establishing parent entity, or other stakeholders) for certain purposes such as accounting and financial reporting.

A virtual entity does not exist by its own, but rather in the books of account and accounting system for its own financial reporting and calculation of profits and losses, and consideration of other aspects (e.g., provisioning, attribution, etc.)


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