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Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K
102
Recently Issued Accounting Standards
Receivables — Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure
(ASU 2014-04)
In January 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-04. The amendments in this ASU clarify the
timing for which an entity should reclassify a loan that has been foreclosed or where an in substance repossession has occurred to real estate
owned. The guidance requires a reclassification to occur when the entity obtains legal title upon completion of foreclosure or the borrower
conveys all interest in the residential real estate property to the entity to satisfy the loan through completion of a deed in lieu of foreclosure or
similar legal agreement. In addition, the ASU clarifies that redemption rights of the borrower should be ignored for purposes of determining
whether legal title has transferred. The amendments are effective for us beginning on January 1, 2015. The amendments can be applied using
either a modified retrospective or prospective basis. Under the modified retrospective approach, the entity should record a cumulative-effect
adjustment to residential consumer mortgage loans and residential real estate owned as of the beginning of the annual period for which the
amendments are effective. The implementation of this guidance will not have a material impact on our consolidated financial condition or
results of operation.
Presentation of Financial Statements and Property, Plant, and Equipment — Reporting Discontinued Operations and
Disclosure of Disposals of Components of an Entity (ASU 2014-08)
In April 2014, the FASB issued ASU 2014-08. The amendments in this ASU modify the requirements for the reporting of discontinued
operations. In order to qualify as a discontinued operation, the disposal of a component of an entity, a group of components, or a business of
an entity must represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The ASU further
indicates that the timing for recording a discontinued operation is when one of the following occurs: the component, group of components, or
business meets the criteria to be classified as held-for-sale; the component, group of components, or business is disposed of by sale; or the
component, group of components, or business is disposed of other than by sale (for example abandonment or spinoff). In addition, the ASU
also requires additional disclosure items about an entity’s discontinued operations. The amendments are effective for us beginning on January
1, 2015. The amendments are to be applied prospectively solely to newly identified disposals that qualify as discontinued operations after the
effective date. Items previously reported as discontinued operations will maintain their classification based on the prior guidance. Early
adoption is permitted, but only for disposals that have not been previously reported as discontinued operations in previously issued financial
statements. Because the guidance is prospective only for newly identified disposals that qualify as a discontinued operation, this guidance will
not have a material impact on our consolidated financial condition or results of operations upon adoption.
Revenue from Contracts with Customers (ASU 2014-09)
In May 2014, the FASB issued ASU 2014-09. The purpose of this guidance is to streamline and consolidate existing revenue recognition
principles in GAAP and to converge revenue recognition principles with International Financial Reporting Standards (IFRS). The core
principle of the amendments is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an
amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The
amendments include a five step process for consideration of the main principle, guidance on the accounting treatment for costs associated
with a contract, and disclosure requirements related to the revenue process. The amendments are effective for us beginning on January 1,
2017. The amendments can be applied either through a full retrospective application or retrospectively with a cumulative effect adjustment on
the date of initial adoption. Early adoption is prohibited. Management is assessing the impact of the adoption of this guidance.
Transfers and Servicing — Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures (ASU
2014-11)
In June 2014, the FASB issued ASU 2014-11. The amendments in this ASU change the accounting for repurchase to maturity
transactions and repurchase financing transactions such that both will be reported as secured borrowings when the guidance becomes
effective. In addition to the changes to how these transactions are reported, the ASU also includes new disclosure requirements. The
amendments are effective for us beginning on January 1, 2015. The amendments are to be applied to all transactions that fall under the
guidance as of the date of adoption with a cumulative effect adjustment recorded on the date of initial adoption. Early adoption is prohibited.
The guidance will not have a material impact on our consolidated financial condition or results of operations.
2. Discontinued and Held-for-sale Operations
Discontinued Operations
We classify operations as discontinued when operations and cash flows will be eliminated from our ongoing operations and we do not
expect to retain any significant continuing involvement in their operations after the respective sale or disposal transactions. For all periods
presented, the operating results for these discontinued operations have been removed from continuing operations and presented separately as
discontinued operations, net of tax, in the Consolidated Statement of Income. The Notes to the Consolidated Financial Statements have been
adjusted to exclude discontinued operations unless otherwise noted.
Select Mortgage Operations
During the second quarter of 2012, we sold the Canadian mortgage operations of ResMor Trust. During the first quarter of 2013, the
operations of our former subsidiary Residential Capital, LLC (ResCap) were classified as discontinued.