Since SoftBank is not acquiring the majority of assets , the company will be an affiliate and not a subsidiary of the Japanese conglomerate . Had SoftBank taken control of the co - workspace operator , Japanese accounting rules would ’ve required it to consolidate the work into its financial statements , adding $ 22bn of debt and $ 47bn of lease obligations to the $ 250 of liabilities already on its balance sheet . By elevating WeWork from a passive investment to an associate , SoftBank no longer needs to mark to expand its holding every time WeWork raises fresh cash . Instead it only needs to include WeWork 's net assets on its balance sheet , and these are still positive , and it may be able to write off its operating losses against taxable income .
Since SoftBank is not acquiring the majority of WeWork, the company will be an associate and not a subsidiary of the Japanese conglomerate. Had SoftBank taken control of the co-workspace operator, Japanese accounting rules would’ve required it to consolidate the work into its financial statements, adding $22bn of debt and $47bn of lease obligations to the $137bn of liabilities already on its balance sheet. By elevating WeWork from a passive investment to an associate, SoftBank no longer needs to mark to market its holding every time WeWork raises fresh cash. Instead SoftBank only needs to include WeWork's net assets on its balance sheet, and these are still positive, and it may be able to write off its operating losses against taxable income.