Goldman Sachs 2003 Annual Report Download - page 82

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Fair Value of Financial Instruments
The following table sets forth the firm’s financial instruments owned, including those pledged as collateral, at fair value,
and financial instruments sold, but not yet purchased, at fair value:
AS OF NOVEMBER
2003 2002
(IN MILLIONS) ASSETS LIABILITIES ASSETS LIABILITIES
Commercial paper, certificates of deposit, time deposits
and other money market instruments $ 4,987 $ — $ 1,092 $ —
U.S. government, federal agency and sovereign obligations 36,634 34,003 36,053 22,272
Corporate and other debt obligations
Mortgage whole loans and collateralized debt obligations 11,768 363 8,292 738
Investment-grade corporate bonds 9,862 4,641 7,959 4,607
Bank loans 6,706 264 4,289 401
High-yield securities 4,817 1,394 1,944 940
Preferred stock 3,822 163 1,543 70
Other 569 157 1,398 146
37,544 6,982 25,425 6,902
Equities and convertible debentures 35,006 19,651 23,624 14,398
State, municipal and provincial obligations 459 — 715 —
Derivative contracts 45,733 41,886 42,205 38,921
Physical commodities 356 177 661 980
Total $160,719 $102,699 $129,775 $83,473
Notes to Consolidated Financial Statements
80 GOLDMAN SACHS 2003 ANNUAL REPORT
additional disclosure requirements. The provisions of
SFAS No. 150 are generally effective for financial instru-
ments entered into or modified after May 31, 2003,
except for those provisions relating to noncontrolling
interests that have been deferred. As required, the firm
adopted the applicable provisions of SFAS No. 150 to all
financial instruments at the beginning of the firm’s fourth
quarter of fiscal 2003. Adoption did not have a material
effect on the firm’s financial condition, results of opera-
tions or cash flows. If the deferred provisions are finalized
in their current form, management does not expect adop-
tion to have a material effect on the firm’s financial con-
dition, results of operations or cash flows.
In December 2003, the FASB issued SFAS No. 132
(revised 2003), “Employers’ Disclosures about Pensions
and Other Postretirement Benefits.” SFAS No. 132
revises employers’ disclosures about pension plans and
other postretirement benefits by requiring additional dis-
closures such as descriptions of the types of plan assets,
investment strategies, measurement dates, plan obliga-
tions, cash flows and components of net periodic benefit
costs recognized during interim periods. The statement
does not change the measurement or recognition of the
plans. Interim period disclosure is generally effective for
the firm’s second quarter of 2004. Required annual dis-
closure is effective for the firm’s fiscal year ending 2004.
note 3
FINANCIAL INSTRUMENTS
Financial instruments, including both cash instruments
and derivatives, are used to manage market risk, facilitate
customer transactions, engage in proprietary transactions
and meet financing objectives. These instruments can be
either executed on an exchange or negotiated in the
OTC market.
Transactions involving financial instruments sold, but
not yet purchased, generally entail obligations to pur-
chase financial instruments at future dates. The firm
may incur a loss if the market value of the financial
instrument subsequently increases prior to the purchase
of the instrument.