A Ltd. is a corporation established for the sole purpose of owing and leasing a property. An outside investor financed the purchase of the property with cash in exchange for 100% of the common shares of A Ltd. and a guaranteed annual return of 5%. The property is leased to B Ltd. to be used in B Ltd.'s business operations. B Ltd. has veto power on all key operating, investing, and financing decisions for A Ltd. and bears the risk of using the property in its business but will receive the profit earned through the use of the property and its sale. Which of the following statements describes the reporting requirements for B Ltd. for A Ltd.

Multiple Choice

B Ltd. is the primary beneficiary of A Ltd. and is required to include A Ltd.'s assets and liabilities on its consolidated balance sheet.

A Ltd. is a special-purpose entity that is often used for off-balance sheet financing and is not required to be reported by B Ltd.

B Ltd. does not own any voting shares in A Ltd.; therefore, consolidated financial statements are not required.

The property leased from A Ltd. is of integral importance to B Ltd.'s business; therefore, the relationship between the two companies only requires note disclosure.