KeyBank 2014 Annual Report Download - page 133

Short-Term Investments
Short-term investments consist of segregated, interest-bearing deposits due from banks, the Federal Reserve, and
certain non-U.S. banks as well as reverse repurchase agreements. Reverse repurchase agreements are further
described under the “Repurchase agreements” heading in this section.
Trading Account Assets
Trading account assets are debt and equity securities, as well as commercial loans that we purchase and hold but
intend to sell in the near term. These assets are reported at fair value. Realized and unrealized gains and losses on
trading account assets are reported in “other income” on the income statement.
Securities
Securities available for sale. Securities available for sale are securities that we intend to hold for an indefinite
period of time but that may be sold in response to changes in interest rates, prepayment risk, liquidity needs, or
other factors. Securities available for sale are reported at fair value. Unrealized gains and losses (net of income
taxes) deemed temporary are recorded in equity as a component of AOCI on the balance sheet. Unrealized losses
on equity securities deemed “other-than-temporary,” and realized gains and losses resulting from sales of
securities using the specific identification method, are included in “other income” on the income statement.
Unrealized losses on debt securities deemed “other-than-temporary” are included in “other income” on the
income statement or in AOCI in accordance with the applicable accounting guidance, as further described under
the heading “Other-than-Temporary Impairments” in this note and in Note 7 (“Securities”).
“Other securities” held in the available-for-sale portfolio consist of marketable equity securities that are traded on
a public exchange such as the NYSE or NASDAQ and convertible preferred stock of a privately held company.
Held-to-maturity securities. Held-to-maturity securities are debt securities that we have the intent and ability to
hold until maturity. Debt securities are carried at cost and adjusted for amortization of premiums and accretion of
discounts using the interest method. This method produces a constant rate of return on the adjusted carrying
amount.
“Other securities” held in the held-to-maturity portfolio consist of foreign bonds and capital securities.
Other-than-Temporary Impairments
If the amortized cost of a debt security is greater than its fair value and we intend to sell it, or it is more-likely-
than-not that we will be required to sell it, before the expected recovery of the amortized cost, then the entire
impairment is recognized in earnings. If we have no intent to sell the security, or it is more-likely-than-not that
we will not be required to sell it, before expected recovery, then the credit portion of the impairment is
recognized in earnings, while the remaining portion attributable to factors such as liquidity and interest rate
changes is recognized in equity as a component of AOCI on the balance sheet. The credit portion is equal to the
difference between the cash flows expected to be collected and the amortized cost of the debt security.
Generally, if the amortized cost of an equity security is greater than its fair value by more than 20% consistently
for more than six months, the difference is considered to be other-than-temporary.
Other Investments
Principal investments — investments in equity and debt instruments made by our Principal Investing unit —
represented 53% and 57% of other investments at December 31, 2014, and December 31, 2013, respectively, and
included both direct investments (investments made in a particular company) and indirect investments
(investments made through funds that include other investors). Principal investments are predominantly made in
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