Capital One 2014 Annual Report Download - page 158

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partnerships; and (iii) other assets, including infrastructure and capabilities. At closing, we acquired approximately
27 million new active accounts, approximately $27.8 billion in outstanding credit card receivables designated as
held for investment (“HFI”) and approximately $327 million in other net assets.
On February 17, 2012, we completed the acquisition (the “ING Direct acquisition”) of substantially all of the ING
Direct business in the United States (“ING Direct”) from ING Groep N.V., ING Bank N.V., ING Direct N.V. and
ING Direct Bancorp (collectively the “ING Direct Sellers”). The ING Direct acquisition resulted in the addition of
loans of $40.4 billion, other assets of $53.9 billion and deposits of $84.4 billion as of the acquisition date.
Basis of Presentation and Use of Estimates
The accompanying consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the U.S. (“U.S. GAAP”). The preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated
financial statements and in the related disclosures. These estimates are based on information available as of the date
of the consolidated financial statements. While management makes its best judgment, actual amounts or results
could differ from these estimates. Certain prior period amounts have been reclassified to conform to the current
period presentation.
Principles of Consolidation
The consolidated financial statements include the accounts of Capital One Financial Corporation and all other entities
in which we have a controlling financial interest. We determine whether we have a controlling financial interest in
an entity by first evaluating whether the entity is a voting interest entity or a Variable Interest Entity (“VIE”). All
significant intercompany account balances and transactions have been eliminated.
Voting Interest Entities
Voting interest entities are entities that have sufficient equity and provide the equity investors voting rights that give
them the power to make significant decisions relating to the entity’s operations. Since a controlling financial interest
in an entity is typically obtained through ownership of a majority voting interest, we consolidate our majority-owned
subsidiaries and other voting interest entities in which we hold, directly or indirectly, more than 50% of the voting
rights or where we exercise control through other contractual rights.
Investments in entities where we do not have a controlling financial interest but we have significant influence over
the entity’s financial and operating decisions (generally defined as owning a voting interest of 20% to 50%) are
accounted for under the equity method. If we own less than 20% of a voting interest entity, we generally carry the
investment at cost, except marketable equity securities, which we carry at fair value with changes in fair value
included in accumulated other comprehensive income (“AOCI”). We typically report investments accounted for
under the equity or cost method in other assets on our consolidated balance sheets, and include our share of income
or loss on equity method investments and dividends on cost method investments in other non-interest income in our
consolidated statements of income.
Variable Interest Entities
VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities without
additional subordinated financial support from other parties; or (ii) have equity investors that do not have the ability
to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation
CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)