Goldman Sachs 2013 Annual Report Download - page 161

Notes to Consolidated Financial Statements
Gains and Losses on Financial Assets and Financial
Liabilities Accounted for at Fair Value Under the
Fair Value Option
The table below presents the gains and losses recognized as
a result of the firm electing to apply the fair value option to
certain financial assets and financial liabilities. These gains
and losses are included in “Market making” and “Other
principal transactions.” The table below also includes gains
and losses on the embedded derivative component of hybrid
financial instruments included in unsecured short-term
borrowings, unsecured long-term borrowings and deposits.
These gains and losses would have been recognized under
other U.S. GAAP even if the firm had not elected to account
for the entire hybrid financial instrument at fair value.
The amounts in the table exclude contractual interest,
which is included in “Interest income” and “Interest
expense,” for all instruments other than hybrid financial
instruments. See Note 23 for further information about
interest income and interest expense.
Gains/(Losses) on Financial
Assets and Financial Liabilities
at Fair Value
Under the Fair Value Option
Year Ended December
in millions 2013 2012 2011
Receivables from customers and
counterparties 1$ 25 $ 190 $ 97
Other secured financings (412) (190) (63)
Unsecured short-term borrowings 2(151) (973) 2,149
Unsecured long-term borrowings 3683 (1,523) 2,336
Other liabilities and accrued expenses 4(167) (1,486) (911)
Other 5(56) (81) 90
Total $ (78) $(4,063) $3,698
1. Primarily consists of gains/(losses) on certain insurance contracts and certain
transfers accounted for as receivables rather than purchases.
2. Includes gains/(losses) on the embedded derivative component of hybrid
financial instruments of $(46) million for 2013, $(814) million for 2012 and
$2.01 billion for 2011.
3. Includes gains/(losses) on the embedded derivative component of hybrid
financial instruments of $902 million for 2013, $(887) million for 2012 and
$1.80 billion for 2011.
4. Primarily consists of gains/(losses) on certain insurance contracts and
subordinated liabilities issued by consolidated VIEs.
5. Primarily consists of gains/(losses) on deposits, resale and repurchase
agreements, securities borrowed and loaned and other assets.
Excluding the gains and losses on the instruments
accounted for under the fair value option described above,
“Market making” and “Other principal transactions”
primarily represent gains and losses on “Financial
instruments owned, at fair value” and “Financial
instruments sold, but not yet purchased, at fair value.”
Loans and Lending Commitments
The table below presents the difference between the
aggregate fair value and the aggregate contractual principal
amount for loans and long-term receivables for which the
fair value option was elected.
As of December
in millions 2013 2012
Performing loans and long-term receivables
Aggregate contractual principal in excess of the
related fair value $ 3,106 $ 2,742
Loans on nonaccrual status and/or more than
90 days past due 1
Aggregate contractual principal in excess of the
related fair value 18,715 22,610
Aggregate contractual principal in excess of the
related fair value (excluding loans carried at zero
fair value and considered uncollectible) 11,041 13,298
Aggregate fair value of loans on nonaccrual status
and/or more than 90 days past due 2,781 1,832
1. The aggregate contractual principal amount of these loans exceeds the related
fair value primarily because the firm regularly purchases loans, such as
distressed loans, at values significantly below contractual principal amounts.
As of December 2013 and December 2012, the fair value of
unfunded lending commitments for which the fair value
option was elected was a liability of $1.22 billion and
$1.99 billion, respectively, and the related total contractual
amount of these lending commitments was $51.54 billion
and $59.29 billion, respectively. See Note 18 for further
information about lending commitments.
Goldman Sachs 2013 Annual Report 159