Case of San Diego Technology Holdings Inc

The applicable provisions of FIN 46 (R) which were introduced by FASB and the corresponding accounting models developed under GAAP, relating to the transactions in respect of related parties have to be analyzed before considering the bidding to the account of San Diego Technology Holdings Inc. From a study of the balance sheet of the firm and the notes on accounts, it can be concluded that the letter of credit guarantees and trade obligation guarantees extended by San Diego to EOTT will not be required to be consolidated.