Morgan Stanley 2014 Annual Report Download - page 176

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or
Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. In March 2013, the FASB
issued an accounting update requiring the parent entity to release any related cumulative translation adjustment
into net income when the parent ceases to have a controlling financial interest in a subsidiary that is a foreign
entity. When the parent ceases to have a controlling financial interest in a subsidiary or group of assets that is a
business within a foreign entity, the related cumulative translation adjustment would be released into net income
only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in
which the subsidiary or group of assets had resided. This guidance became effective for the Company
prospectively beginning on January 1, 2014. The adoption of this accounting guidance did not have a material
impact on the Company’s consolidated financial statements.
Amendments to the Scope, Measurement, and Disclosure Requirements of an Investment Company. In June
2013, the FASB issued an accounting update that modifies the criteria used in defining an investment company
under U.S. GAAP and sets forth certain measurement and disclosure requirements. This update requires an
investment company to measure noncontrolling interests in another investment company at fair value and
requires an entity to disclose the fact that it is an investment company, and provide information about changes, if
any, in its status as an investment company. An entity will also need to include disclosures around financial
support that has been provided or is contractually required to be provided to any of its investees. This guidance
became effective for the Company prospectively beginning January 1, 2014. The adoption of this accounting
guidance did not have a material impact on the Company’s consolidated financial statements.
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a
Tax Credit Carryforward Exists. In July 2013, the FASB issued an accounting update providing guidance on
the financial statement presentation of an unrecognized tax benefit when a deferred tax asset from a net operating
loss carryforward, similar tax loss, or tax credit carryforward exists. This guidance requires an unrecognized tax
benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to
such deferred tax asset if a settlement in such manner is expected in the event the uncertain tax position is
disallowed. This guidance became effective for the Company beginning January 1, 2014. This guidance was
applied prospectively to unrecognized tax benefits that existed at the effective date. The adoption of this
accounting guidance did not have a material impact on the Company’s consolidated financial statements.
Accounting for Investments in Qualified Affordable Housing Projects. In January 2014, the FASB issued an
accounting update providing guidance on accounting for investments in flow-through limited liability entities
that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. The
Company adopted this guidance on April 1, 2014, as early adoption is permitted. The adoption of this guidance
did not have a material impact on the Company’s consolidated financial statements. For further information on
the adoption of this guidance, see Note 20.
Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. In April 2014,
the FASB issued an accounting update that changes the requirements and disclosure for reporting discontinued
operations. The new guidance defines a discontinued operation as a disposal of a component or group of
components that is disposed of or is classified as held for sale and represents a strategic shift that has (or will
have) a major effect on an entity’s operations and financial results. Individually significant components that have
been disposed of or are held for sale that do not meet the definition of a discontinued operation require new
disclosures. The Company adopted this guidance on April 1, 2014, as early adoption is permitted. The adoption
of this guidance did not have a material impact on the Company’s consolidated financial statements.
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