PNC Bank 2008 Annual Report Download - page 100

FSP clarifies that certain convertible debt instruments should
be separately accounted for as liability and equity
components. This guidance will be effective beginning with
our first quarter 2009 Form 10-Q. We do not expect the
adoption of this guidance to have a material effect on our
results of operations or financial position.
In June 2008, the FASB issued FSP EITF 03-6-1,
“Determining Whether Instruments Granted in Share-Based
Payment Transactions Are Participating Securities.” This FSP
clarifies that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend
equivalents are considered participating securities and should
be included in the calculation of basic earnings per share using
the two-class method prescribed by SFAS 128, “Earnings Per
Share.” This guidance will be effective for disclosure
beginning with our first quarter 2009 Form 10-Q with
retrospective application required. We do not expect the
adoption of this guidance to have a material effect on our
earnings per share disclosures.
In September 2008, the FASB issued FSP FAS 133-1 and FIN
45-4, “Disclosures about Credit Derivatives and Certain
Guarantees: An Amendment of FASB Statement No. 133 and
FASB Interpretation No. 45; and Clarification of the Effective
Date of FASB Statement No. 161.” This FSP amends FASB
Statement No. 133, “Accounting for Derivative Instruments
and Hedging Activities,” to require disclosures by sellers of
credit derivatives, including credit derivatives embedded in a
hybrid instrument. This FSP also amends FASB Interpretation
No. 45, “Guarantor’s Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees
of Indebtedness of Others,” to require additional disclosure
about the payment/performance risk of a guarantee. This
guidance was effective December 31, 2008 for PNC. See Note
25 Commitments and Guarantees for additional information.
In September 2008, the FASB issued an Exposure Draft,
“Proposed Statement, Amendments to FASB Interpretation
No. 46(R).” This proposed Statement would amend FIN 46R
and require ongoing assessments to determine: 1) whether an
entity is a variable interest entity and, 2) whether an enterprise
is the primary beneficiary of a variable interest entity. The
primary beneficiary determination generally would be based
on a qualitative analysis based on who has power over the
activities of the entity and the rights to receive benefits or
absorb losses. Enhanced disclosures would also be required.
This proposed guidance would be effective for PNC beginning
January 1, 2010. The guidance as proposed could require us to
consolidate certain VIEs or securitization trusts if we are
deemed the primary beneficiary.
In September 2008, the FASB issued an Exposure Draft,
“Proposed Statement, Accounting for Transfers of Financial
Assets – an amendment of FASB Statement No. 140.” This
proposed Statement, a revision of a 2005 FASB Exposure
Draft, would remove (1) the concept of a qualifying SPE from
FASB Statement No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities,” and (2) the exceptions from applying FIN 46R to
qualifying SPEs. This proposed Statement would also revise
and clarify the derecognition requirements for transfers of
financial assets, establish conditions for transfer of a portion
of a financial asset, and requiring the initial measurement of
beneficial interests that are received as proceeds in connection
with transfers of financial assets at fair value. This proposed
guidance would be effective for PNC beginning January 1,
2010.
In October 2008, the FASB issued FSP FAS 157-3,
“Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active.” This FSP clarifies the
application of FASB Statement No. 157, “Fair Value
Measurements,” in a market that is not active and provides an
example to illustrate key considerations in determining the fair
value of a financial asset when the market for that financial
asset is not active. This guidance was considered in
determining the fair value of financial assets beginning
September 30, 2008.
In December 2008, the FASB issued FSP FAS 140-4 and FIN
46(R)-8, “Disclosures by Public Entities (Enterprises) about
Transfers of Financial Assets and Interests in Variable Interest
Entities.” This FSP amends FASB Statement No. 140,
“Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities,” and will require
additional disclosures about transfers of financial assets. It
also amends FASB Interpretation No. 46 (revised December
2003), “Consolidation of Variable Interest Entities,” and
requires additional disclosures about involvement with
variable interest entities. This guidance was effective
December 31, 2008 for PNC. See Note 3 Variable Interest
Entities for additional information.
In December 2008, the FASB issued FSP FAS 132(R)-1,
“Employers’ Disclosures about Postretirement Benefit Plan
Assets.” This FSP amends FASB Statement No. 132 (revised
2003), “Employers’ Disclosures about Pensions and Other
Postretirement Benefits,” to provide guidance on an
employer’s disclosures about plan assets of a defined benefit
pension or other postretirement plan. This guidance will be
effective December 31, 2009 for PNC.
In January 2009, the FASB issued FSP EITF 99-20-1,
“Amendments to the Impairment Guidance of EITF Issue
No. 99-20.” This FSP amends the impairment guidance in
EITF Issue No. 99-20, “Recognition of Interest income and
Impairment on Purchased Beneficial Interests and Beneficial
Interest That Continue to Be Held by a Transferor in
Securitized Financial Assets.” The FSP also retains and
emphasizes the objective of an other-than-temporary
impairment assessment and the related disclosure
requirements in FASB Statement No. 115, “Accounting for
Certain Investments in Debt and Equity Securities,” and other
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