A special purpose vehicle (SPV) or special purpose entity (SPE) is a company that is created solely for a particular financial transaction or series of transactions. It may sometimes be something other than a company, such as a trust. The SPV's debts may, or may not, be raised with recourse to the “real” borrower.
SPVs/SPEs are often used to make a transaction tax efficient by choosing the most favourable tax residence for the vehicle. This is commonly done with eurobonds so that foreign investors do not have to pay withholding taxes in the borrower's country of residence.
The owner of the SPV will not be the company that creates it. It will typically be owned by a trustee, often with a charitable objective in order to fulfil the legal requirement that a trust must have such an objective and the company behind it cannot be the beneficial owner if the SPV is to remain off its balance sheet.
The management of an SPV will need to be structured in a way that takes account of accounting standards that require a company controlled by another to be consolidated as a subsidiary. This is not usually a problem as SPVs require very little in the way of management.
The effect of SPVs on accounts is obviously open to abuse. SPVs have often been used to manipulate published accounts, most notoriously by Enron. Accounting rules have since been tightened to make such abuses harder.