Citibank 2011 Annual Report Download - page 172

150
Non-Consolidation of Certain Investment Funds
The FASB issued Accounting Standards Update No. 2010-10, Consolidation
(Topic 810), Amendments for Certain Investment Funds (ASU 2010-10)
in the first quarter of 2010. ASU 2010-10 provides a deferral of the
requirements of SFAS 167 where the following criteria are met:
฀ The entity being evaluated for consolidation is an investment company,
as defined in ASC 946-10, Financial Services—Investment Companies,
or an entity for which it is acceptable based on industry practice to apply
measurement principles that are consistent with an investment company;
฀ The reporting enterprise does not have an explicit or implicit obligation to
fund losses of the entity that could potentially be significant to the entity;
and
฀ The entity being evaluated for consolidation is not:
a securitization entity; –
an asset-backed financing entity; or –
an entity that was formerly considered a qualifying special-purpose –
entity.
The Company has determined that a majority of the investment vehicles
managed by Citigroup are provided a deferral from the requirements of
SFAS 167 because they meet these criteria. These vehicles continue to be
evaluated under the requirements of FIN 46(R) (ASC 810-10), prior to the
implementation of SFAS 167.
Where the Company has determined that certain investment vehicles are
subject to the consolidation requirements of SFAS 167, the consolidation
conclusions reached upon initial application of SFAS 167 are consistent
with the consolidation conclusions reached under the requirements of ASC
810-10, prior to the implementation of SFAS 167.
Investments in Certain Entities that Calculate Net
Asset Value per Share
As of December 31, 2009, the Company adopted Accounting Standards Update
(ASU) No. 2009-12, Investments in Certain Entities that Calculate Net Asset
Value per Share (or its Equivalent), which provides guidance on measuring
the fair value of certain alternative investments. The ASU permits entities to
use net asset value as a practical expedient to measure the fair value of their
investments in certain investment funds. The ASU also requires additional
disclosures regarding the nature and risks of such investments and provides
guidance on the classification of such investments as Level 2 or Level 3 of
the fair value hierarchy. This ASU did not have a material impact on the
Company’s accounting for its investments in alternative investment funds.
Multiple Foreign Exchange Rates
In May 2010, the FASB issued ASU 2010-19, Foreign Currency Issues:
Multiple Foreign Currency Exchange Rates. The ASU requires certain
disclosure in situations when an entity’s reported balances in U.S. dollar
monetary assets held by its foreign entities differ from the actual U.S.
dollar-denominated balances due to different foreign exchange rates used in
remeasurement and translation. The ASU also clarifies the reporting for the
difference between the reported balances and the U.S. dollar-denominated
balances upon the initial adoption of highly inflationary accounting. The
ASU does not have a material impact on the Company’s accounting.
Effect of a Loan Modification When the Loan Is Part of a
Pool Accounted for as a Single Asset (ASU No. 2010-18)
In April 2010, the FASB issued ASU No. 2010-18, Effect of a Loan
Modification When the Loan is Part of a Pool Accounted for as a Single
Asset. As a result of the amendments in this ASU, modifications of loans
that are accounted for within a pool do not result in the removal of those
loans from the pool, even if the modification of those loans would otherwise
be considered a troubled debt restructuring. An entity will continue to be
required to consider whether the pool of assets in which the loan is included
is impaired if expected cash flows for the pool change. The ASU was effective
for reporting periods ending on or after July 15, 2010. The ASU had no
material effect on the Company’s financial statements.
Measuring Liabilities at Fair Value
As of September 30, 2009, the Company adopted ASU No. 2009-05,
Measuring Liabilities at Fair Value. This ASU provides clarification that in
circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using one or more of the following techniques:
฀ a valuation technique that uses quoted prices for similar liabilities (or an
identical liability) when traded as assets; or
฀ another valuation technique that is consistent with the principles of
ASC 820.
This ASU also clarifies that both a quoted price in an active market for
the identical liability at the measurement date and the quoted price for
the identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value
measurements. This ASU did not have a material impact on the Company’s
fair value measurements.