SEC Filings

AVEXIS, INC. filed this Form 10-K on 03/18/2016
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Table of Contents

AveXis, Inc.

Notes to Consolidated Financial Statements (Continued)

2. Summary of Significant Accounting Policies

Basis of Presentation

        The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). These consolidated financial statements are presented in U.S. dollars.

Basis of Consolidation

        The Consolidated Financial Statements include the accounts of AveXis, Inc. and all of its controlled subsidiary companies and affiliates for which the Company holds a majority voting interest. All significant intercompany accounts and transactions have been eliminated.

        The Company applies the variable interest model under FASB ASC Topic 810, Consolidation ("ASC 810"), to any entity in which the Company holds an equity investment or to which the Company has the power to direct the entity's most significant economic activities and the ability to participate in the entity's economics. If the entity is within the scope of the model, and meets the definition of a variable interest entity ("VIE"), the Company considers whether it must consolidate the VIE or if further disclosures regarding the Company's involvement with the VIE are necessary. If the Company is determined to be the primary beneficiary of the VIE, the Company will consolidate the VIE. This analysis is performed at the initial investment in the entity or upon any reconsideration event.

        The Company considers a legal entity a VIE if (i) its investors do not have sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (ii) as a group, the holders of the equity investment at risk do not have both the power to direct the activities of the legal entity that most significantly impact the entity's economic performance, and the obligation to absorb the expected losses or the right to receive expected residual returns of the legal entity. The Company considers itself to be the primary beneficiary of a VIE if the Company has both the power to direct the activities that most significantly affect the VIE's economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE. If the Company, or any of the Company's related parties that have a variable interest in the VIE, individually lack the necessary power and benefits criteria, but the related party group as a whole has the necessary power and benefits, the Company determines which of the related party group members is most closely associated with the VIE and considers that party to be the primary beneficiary.

        As of December 31, 2013 the Company consolidated two VIEs, Biolife Dallas and Sixeva, Inc. On January 30, 2014 the Company disposed of Biolife Dallas and, as a result, as of December 31, 2014, the Company consolidated only Sixeva, Inc. as a VIE. See Note 3 for further information regarding the Company's involvement and variable interests in these entities.

Use of Estimates

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in


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