Discover 2009 Annual Report Download - page 62

In our payments business, we continue to focus on increasing global volume across the Discover, PULSE and Diners
Club networks by leveraging our flexibility, network relationships and emerging payments opportunities. This effort
includes the rapid implementation of our U.S. acceptance strategy, which is based on increasing the number of active
merchants who accept Discover through the numerous acquiring relationships we have built in recent years. Outside the
U.S., we will continue to work with various Diners Club licensees, acquirers and other payment networks to grow volume
and continue the expansion of our acceptance footprint, which includes the global cash access network we launched in
2009. In 2010, we expect to make investments in an attempt to grow volume and market share for our payments business
around the world.
Accounting Treatment for Off-Balance Sheet Securitizations
In June 2009, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting
Standards No. 166, Accounting for Transfers of Financial Assets-an amendment of FASB Statement No. 140 (“Statement
No. 166”) and Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretation No. 46(R)
(“Statement No. 167”). In December 2009, Statement No. 166 was codified within the FASB Accounting Standards
Codification under Section 860, Transfers and Servicing, and Statement No. 167 was codified within Section 810,
Consolidation. For ease of reference, and to clarify between guidance applicable as of the date of the accompanying
financial statements and guidance applicable to future periods, we will continue to refer to Statements No. 166 and 167
under their previous names within this document. Statement No. 166 amends the accounting for transfers of financial
assets and will impact the accounting for our credit card asset securitization activities. Under Statement No. 166, the
trusts used in our securitization transactions will no longer be exempt from consolidation. Statement No. 167 prescribes
an ongoing assessment of our involvement in the activities of the trusts and our rights or obligations to receive benefits or
absorb losses of the trusts that could be potentially significant in order to determine whether those entities will be required
to be consolidated on our financial statements. The assessment under Statement No. 167, which became effective for us
on December 1, 2009, will result in the consolidation of the trusts by us as of that date. Using the carrying amounts of the
trust assets and liabilities as prescribed by Statement No. 167, we expect to record a $21.1 billion increase in total
assets, a $22.4 billion increase in total liabilities and a $1.3 billion decrease in stockholders’ equity (comprised of a $1.4
billion decrease in retained earnings offset by an increase of $0.1 billion in other comprehensive income).
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