Capital One 2012 Annual Report Download - page 269

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
•Non-interest income: Non-interest fees and other revenue associated with loans or customers managed by
each business segment and other direct revenues are accounted for within each business segment.
•Provision for credit losses: The provision for credit losses is directly attributable to the business segment in
which the loans are managed.
•Non-interest expense: Non-interest expenses directly managed and incurred by a business segment are
accounted for within each business segment. We allocate certain non-interest expenses indirectly incurred
by business segments, such as corporate support functions, to each business segment based on various
factors, including the actual cost of the services from the service providers, the utilization of the services,
the number of employees or other relevant factors.
•Goodwill and other intangible assets: Goodwill and other intangible assets are assigned to business
segments based on the relative fair value of each segment. Intangible amortization is included in the results
of the applicable segment.
•Income taxes: Income taxes are assessed for each business segment based on a standard tax rate with the
residual tax expense or benefit to arrive at the consolidated effective tax rate included in the “Other”
category.
•Loans held for investment: Loans are reported within each business segment based on product or customer
type.
•Deposits: Deposits are reported within each business segment based on product or customer type.
Segment Results and Reconciliation
We may periodically change our business segments or reclassify business segment results based on modifications
to our management reporting methodologies and changes in organizational alignment. In the first quarter of
2012, we re-aligned the loan categories reported by our Commercial Banking business and the loan customer and
product types included within each category. As a result of this re-alignment, we now report three product
categories: commercial and multifamily real estate, commercial and industrial loans and small-ticket commercial
real estate, which is a run-off portfolio. We previously reported four categories within our Commercial Banking
business: commercial and multifamily real estate, middle market, specialty lending and small-ticket commercial
real estate. Middle market and specialty lending related products are included in commercial and industrial loans.
All affordable housing tax-related investments, some of which were previously included in the “Other” segment,
are now included in the commercial and multifamily real estate category of our Commercial Banking business.
250