Goldman Sachs 2015 Annual Report Download - page 139

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Disclosures for Investments in Certain Entities That
Calculate Net Asset Value (NAV) per Share (or Its
Equivalent) (ASC 820). In May 2015, the FASB issued
ASU No. 2015–07, “Fair Value Measurement
(Topic 820) — Disclosures for Investments in Certain
Entities That Calculate Net Asset Value per Share (or Its
Equivalent).” ASU No. 2015–07 requires that investments
for which the fair value is measured at NAV using the
practical expedient (investments in funds measured at
NAV) under “Fair Value Measurements and Disclosures”
(Topic 820) be excluded from the fair value hierarchy. ASU
No. 2015–07 is effective for annual reporting periods
beginning after December 15, 2015, including interim
periods within that reporting period. ASU No. 2015–07 is
required to be applied retrospectively to all periods
presented beginning in the period of adoption. Early
adoption was permitted. The firm early adopted ASU
No. 2015–07 in June 2015 and adoption did not affect the
firm’s financial condition, results of operations, or cash
flows. In accordance with ASU No. 2015-07, previously
reported amounts have been conformed to the current
presentation. See Notes 4 through 6 for the disclosures
required by ASU No. 2015-07.
Simplifying the Accounting for Measurement-Period
Adjustments (ASC 805). In September 2015, the FASB
issued ASU No. 2015-16, “Business Combinations
(Topic 805) — Simplifying the Accounting for
Measurement-Period Adjustments.” ASU No. 2015-16
eliminates the requirement for an acquirer in a business
combination to account for measurement-period
adjustments retrospectively. ASU No. 2015-16 was
effective for annual reporting periods beginning after
December 15, 2015, including interim periods within that
reporting period. Adoption of ASU No. 2015-16 in the first
quarter of 2016 did not materially affect the firm’s financial
condition, results of operations, or cash flows.
Recognition and Measurement of Financial Assets and
Financial Liabilities (ASC 825). In January 2016, the FASB
issued ASU No. 2016-01, “Financial Instruments
(Topic 825) — Recognition and Measurement of Financial
Assets and Financial Liabilities.” ASU No. 2016-01 amends
certain aspects of recognition, measurement, presentation and
disclosure of financial instruments. This guidance includes a
requirement to present separately in other comprehensive
income changes in fair value attributable to a firm’s own credit
spreads (debt valuation adjustments or DVA), net of tax, on
financial liabilities for which the fair value option was elected.
ASU No. 2016-01 is effective for annual reporting periods
beginning after December 15, 2017, including interim periods
within that reporting period. Early adoption is permitted
under a modified retrospective approach for the requirements
related to DVA. The cumulative DVA gain, net of tax, of
approximately $300 million as of December 2015, will be
reclassified from retained earnings to accumulated other
comprehensive loss if ASU No. 2016-01 is early adopted by
the firm in 2016. In addition, any DVA recorded during 2016
would be classified as other comprehensive income/(loss).
Note 4.
Financial Instruments Owned, at Fair Value
and Financial Instruments Sold, But Not
Yet Purchased, at Fair Value
Financial instruments owned, at fair value and financial
instruments sold, but not yet purchased, at fair value are
accounted for at fair value either under the fair value option
or in accordance with other U.S. GAAP. See Note 8 for
further information about other financial assets and
financial liabilities accounted for at fair value primarily
under the fair value option.
Goldman Sachs 2015 Form 10-K 127