Capital One 2014 Annual Report Download - page 175

153
Obligations Resulting from Joint and Several Liability Arrangements
In February 2013, the FASB issued guidance for the recognition, measurement, and disclosure of obligations
resulting from joint and several liability arrangements for which the total amount of the obligation, within the scope
of this guidance, is fixed at the reporting date, except for obligations addressed within existing guidance in U.S.
GAAP. The guidance clarified that an entity shall measure the obligations as the sum of the amount the reporting
entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting
entity expects to pay on behalf of its co-obligors. The guidance also requires an entity to disclose the nature and
amounts of the obligations as well as other information about those obligations. The guidance is effective for annual
and interim periods beginning after December 15, 2013. The adoption of this guidance in the first quarter of 2014
did not have a significant impact on our financial condition, results of operations or liquidity as the guidance is
consistent with our current practice.
Recently Issued but Not Yet Adopted Accounting Standards
Consolidation: Amendments to the Consolidation Analysis
In February 2015, the FASB issued revised guidance intended to improve upon and simplify the consolidation
assessment required to evaluate whether organizations should consolidate certain legal entities such as limited
partnerships, limited liability corporations, and securitization structures. The guidance also removed the indefinite
deferral of specialized guidance for certain investment funds. This guidance is effective for annual and interim
periods beginning after December 15, 2015, with early adoption permitted. Entities can elect to adopt the guidance
either on a full or modified retrospective basis. We are currently evaluating the guidance to determine whether our
consolidation conclusions will change for certain legal entities. Accordingly, we cannot yet determine the impact
our adoption of this guidance will have in the first quarter of 2016.
Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could
Be Achieved after the Requisite Service Period
In June 2014, the FASB issued guidance clarifying that a performance target contained within a share-based payment
award that affects vesting and can be achieved after the requisite service period has been completed is to be
accounted for as a performance condition. Accordingly, the grantor of such awards should recognize compensation
cost in the period in which it becomes probable that the performance target will be achieved. The amount of the
compensation cost recognized should represent the cost attributable to the requisite service period fulfilled. The
guidance is effective for annual and interim periods beginning after December 15, 2015, with early adoption
permitted. Entities may elect to adopt the guidance on either a prospective or modified retrospective basis. We do
not expect our adoption of this guidance in the first quarter of 2015 to have a significant impact on our financial
condition, results of operations or liquidity as the guidance is consistent with our current practice.
Accounting for Repurchase Transactions
In June 2014, the FASB issued guidance that requires repurchase-to-maturity transactions to be accounted for as
secured borrowings rather than sales. New disclosures will also be required for certain transactions accounted for
as secured borrowings and transfers accounted for as sales when the transferor retains substantially all of the exposure
to the economic return on the transferred financial assets. We do not expect our adoption of the accounting guidance
in the first quarter of 2015 to have a significant impact on our financial condition, results of operations or liquidity
as the guidance is consistent with our current practice. The new disclosures will be provided beginning in the second
quarter of 2015.
CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)