A special-purpose entity (SPE; or, in Europe and India, special-purpose vehicle/SPV; or, in some cases in each EU jurisdiction, FVC, financial vehicle corporation) is a legal entity (usually a limited company of some type or, sometimes, a limited partnership) created to fulfill narrow, specific or temporary objectives.
They are an integral part of public private partnerships common throughout Europe which rely on a project finance type structure.
One of the reasons for the collapse of the Enron SPE was that it became a vehicle for furthering the ends of the parent company in violation of the prudential norms of corporate financing and accounting.
They were also used to hide losses and overstate earnings by executives at Towers Financial Corporation, which declared bankruptcy in 1994.
Several executives of the company were found guilty of securities fraud, served prison sentences, and paid fines.
[5] Under US GAAP, a number of accounting standards apply to SPEs, most notably FIN 46R that sets out the consolidation treatment of these entities.