Goldman Sachs 2013 Annual Report Download - page 122

Notes to Consolidated Financial Statements
Foreign Currency Translation
Assets and liabilities denominated in non-U.S. currencies
are translated at rates of exchange prevailing on the date of
the consolidated statements of financial condition and
revenues and expenses are translated at average rates of
exchange for the period. Foreign currency remeasurement
gains or losses on transactions in nonfunctional currencies
are recognized in earnings. Gains or losses on translation of
the financial statements of a non-U.S. operation, when the
functional currency is other than the U.S. dollar, are
included, net of hedges and taxes, in the consolidated
statements of comprehensive income.
Recent Accounting Developments
Derecognition of in Substance Real Estate (ASC 360).
In December 2011, the FASB issued ASU No. 2011-10,
“Property, Plant, and Equipment (Topic 360) —
Derecognition of in Substance Real Estate — a Scope
Clarification.” ASU No. 2011-10 clarifies that in order to
deconsolidate a subsidiary (that is in substance real estate
due to a default on the subsidiary’s nonrecourse debt), the
parent must no longer control the subsidiary and also must
satisfy the sale criteria in ASC 360-20, “Property, Plant,
and Equipment — Real Estate Sales.” The ASU was
effective for fiscal years beginning on or after
June 15, 2012. The firm applied the provisions of the ASU
to such events occurring on or after January 1, 2013.
Adoption of ASU No. 2011-10 did not materially affect the
firm’s financial condition, results of operations or
cash flows.
Disclosures about Offsetting Assets and Liabilities
(ASC 210). In December 2011, the FASB issued ASU
No. 2011-11, “Balance Sheet (Topic 210) — Disclosures
about Offsetting Assets and Liabilities.” ASU No. 2011-11,
as amended by ASU 2013-01, “Balance Sheet (Topic 210):
Clarifying the Scope of Disclosures about Offsetting Assets
and Liabilities,” requires disclosure of the effect or potential
effect of offsetting arrangements on the firm’s financial
position as well as enhanced disclosure of the rights of
setoff associated with the firm’s recognized derivative
instruments, resale and repurchase agreements, and
securities borrowing and lending transactions. ASU
No. 2011-11 was effective for periods beginning on or after
January 1, 2013. Since these amended principles require
only additional disclosures concerning offsetting and
related arrangements, adoption did not affect the firm’s
financial condition, results of operations or cash flows. See
Notes 7 and 9 for further information about the firm’s
offsetting and related arrangements.
Investment Companies (ASC 946). In June 2013, the
FASB issued ASU No. 2013-08, “Financial Services —
Investment Companies (Topic 946) — Amendments to the
Scope, Measurement, and Disclosure Requirements.” ASU
No. 2013-08 clarifies the approach to be used for
determining whether an entity is an investment company
and provides new measurement and disclosure
requirements. ASU No. 2013-08 is effective for interim and
annual reporting periods in fiscal years that begin after
December 15, 2013. Earlier application is prohibited.
Adoption of ASU No. 2013-08 did not affect the firm’s
financial condition, results of operations, or cash flows.
Inclusion of the Fed Funds Effective Swap Rate (or
Overnight Index Swap Rate) as a Benchmark Interest
Rate for Hedge Accounting Purposes (ASC 815). In
July 2013, the FASB issued ASU No. 2013-10, “Derivatives
and Hedging (Topic 815) — Inclusion of the Fed Funds
Effective Swap Rate (or Overnight Index Swap Rate) as a
Benchmark Interest Rate for Hedge Accounting Purposes.”
ASU No. 2013-10 permits the use of the Fed Funds
Effective Swap Rate (OIS) as a U.S. benchmark interest rate
for hedge accounting purposes. The ASU also removes the
restriction on using different benchmark rates for similar
hedges. ASU No. 2013-10 was effective for qualifying new
or redesignated hedging relationships entered into on or
after July 17, 2013 and adoption did not materially affect
the firm’s financial condition, results of operations, or
cash flows.
120 Goldman Sachs 2013 Annual Report