Capital One 2015 Annual Report Download - page 227

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
208 Capital One Financial Corporation (COF)
Other Assets
Included in other assets are foreclosed property, other repossessed assets and long-lived assets held for sale. Foreclosed property,
other repossessed assets and long-lived assets held for sale are carried at the lower of the carrying amount or fair value less costs
to sell. The fair value is determined based on the appraisal value, listing price of the property or collateral provided by independent
appraisers, and is adjusted for the estimated costs to transact the sale. Due to the use of significant unobservable inputs, these assets
are classified as Level 3 under the fair value hierarchy. Fair value adjustments for these assets are recorded in other non-interest
expense in the consolidated statements of income.
Non-Interest Bearing Deposits
The carrying amount of non-interest bearing deposits approximates fair value.
Interest-Bearing Deposits
The fair value of interest-bearing deposits is determined based on discounted expected cash flows using discount rates consistent
with current market rates for similar products with similar remaining terms.
Securitized Debt Obligations
We utilized multiple third-party pricing services to obtain fair value measurements for the large majority of our securitized debt
obligations. The techniques used by the pricing services utilize observable market data to the extent available; and pricing models
may be used which incorporate available trade, bid and other market information. We used internal pricing models, discounted
cash flow models or similar techniques to estimate the fair value of certain securitization trusts where third-party pricing was not
available.
Senior and Subordinated Notes
We engage multiple third-party pricing services in order to estimate the fair value of senior and subordinated notes. The pricing
services utilize pricing models that incorporate available trade, bid and other market information. It also incorporates spread
assumptions, volatility assumptions and relevant credit information into the pricing models.
Federal Funds Purchased and Securities Loaned or Sold under Agreements to Repurchase and Other Borrowings
The carrying amount of federal funds purchased and repurchase agreements approximates fair value. The fair value of FHLB
advances is determined based on discounted expected cash flows using discount rates consistent with current market rates for
FHLB advances with similar remaining terms.
Interest Payable
The carrying amount of interest payable approximates the fair value of this liability due to its relatively short-term nature.