Morgan Stanley 2014 Annual Report Download - page 90

Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.
In June 2014, the FASB issued an accounting update requiring repurchase-to-maturity transactions be accounted
for as secured borrowings consistent with the accounting for other repurchase agreements. This accounting
update also requires separate accounting for a transfer of a financial asset executed contemporaneously with a
repurchase agreement with the same counterparty (a repurchase financing), which will result in secured
borrowing accounting for the repurchase agreement. This guidance is effective for the Company beginning
January 1, 2015. In addition, new disclosures are required for sales of financial assets where the Company retains
substantially all the exposure throughout the term and the collateral pledged and remaining maturity of
repurchase and securities lending agreements, which are effective January 1, 2015, and April 1, 2015,
respectively. This guidance is not expected to have a material impact on the Company’s consolidated financial
statements.
Revenue from Contracts with Customers.
In May 2014, the FASB issued an accounting update to clarify the principles of revenue recognition, to develop a
common revenue recognition standard across all industries for U.S. GAAP and International Financial Reporting
Standards and to provide enhanced disclosures for users of the financial statements. The core principle of this
guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. This guidance is effective for the Company beginning January 1, 2017. The Company is
currently evaluating the potential impact of adopting this accounting standard update.
Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure.
In January 2014, the FASB issued an accounting update clarifying when an in-substance repossession or
foreclosure occurs; that is, when a creditor should be considered to have received physical possession of
residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be
derecognized and the real estate property recognized. This guidance is effective for the Company beginning
January 1, 2015. This guidance can be applied using either a modified retrospective transition method or a
prospective transition method. This guidance is not expected to have a material impact on the Company’s
consolidated financial statements.
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