PNC Bank 2010 Annual Report Download - page 71
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Please find page 71 of the 2010 PNC Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.In July 2010, the FASB issued Proposed Accounting
Standards Update – Contingencies (Topic 450) – Disclosure of
Certain Loss Contingencies. Under the proposal, additional
disclosures would be required, including for remote loss
contingencies with a potentially severe impact and a tabular
reconciliation of accrued loss contingencies. Changes to the
proposed ASU, are scheduled to be re-deliberated and a final
standard is currently expected in the second half of 2011.
In August 2010, the FASB issued Proposed Accounting
Standards Update – Leases (Topic 840). Under the proposal,
lessees and lessors would apply a right-of-use model in
accounting for most leases, including subleases. A lessee
would recognize an asset representing its right to use the
leased asset for the lease term and a liability to make lease
payments and a lessor would recognize an asset representing
its right to receive lease payments and recognize a lease
liability while continuing to recognize the underlying asset or
a residual asset representing its rights to the underlying asset
at the end of the lease term. The exposure draft also proposes
disclosures about the amounts recognized in the financial
statements arising from leases and the amount, timing and
uncertainty of cash flows arising from those contracts.
In October 2010, the FASB issued Proposed Accounting
Standards Update – Receivables (Topic 310-30) –
Clarification to Accounting for Troubled Debt Restructurings
by Creditors. The proposed ASU would preclude a creditor
from using only an effective rate test in its evaluation of
whether a restructuring constitutes a troubled debt
restructuring. Furthermore, guidance would be clarified to
indicate 1) If a debtor does not otherwise have access to funds
at a market rate for debt with similar risk characteristics as the
restructured debt, the restructuring would be considered to be
below a market rate and therefore should be considered a
troubled debt restructuring, 2) A restructuring that results in a
temporary or permanent increase in the contractual interest
rate cannot be presumed to be at a rate that is at or above
market, 3) A borrower that is not currently in default may still
be considered to be experiencing financial difficulty when
payment default is considered “probable in the foreseeable
future” and 4) A restructuring that results in an insignificant
delay in contractual cash flows may still be considered a
troubled debt restructuring. Under the proposal, additional
disclosures (including comparative information) would be
required.
In November 2010, the FASB issued Proposed Accounting
Standards Update – Transfers and Servicing (Topic 860) –
Reconsideration of Effective Control for Repurchase
Agreements. The objective of this proposed ASU is to improve
the accounting for repurchase agreements and other
agreements that both entitle and obligate a transferor to
repurchase or redeem financial assets before their maturity.
This proposed update would remove from the assessment of
effective control (1) the criterion requiring the transferor to
have the ability to repurchase or redeem the financial assets on
substantially the agreed terms, even in the event of default by
the transferee, and (2) implementation guidance related to the
criterion.
In December 2010, the FASB issued Proposed Accounting
Standards Update – Receivables (Topic 310-30) – Deferral of
the Effective Date of Disclosures about Troubled Debt
Restructurings in Update No. 2010-20. Under the proposal,
the effective date requiring the additional disclosures about
troubled debt restructurings in ASU 2010-20 would be
delayed indefinitely. This delay will allow the Board to
complete deliberations on Proposed ASU – Receivables
(Topic 310-30) – Clarifications to Accounting for Troubled
Debt Restructurings by Creditors. This proposal was finalized
and issued in January 2011 as Accounting Standards Update
2011-01.
In January 2011, the FASB issued Proposed Accounting
Standards Update – Balance Sheet – Offsetting. Under the
proposal, balance sheet netting/offsetting would be required if:
1.) the right of set-off is enforceable at all times, including in
default and bankruptcy; and 2.) the ability to exercise this
right is unconditional; and 3.) the entities involved must
intend to settle the amounts due with a single payment, or
simultaneously.
In January 2011, the FASB issued Supplementary Document –
Accounting for Financial Instruments and Revisions to the
Accounting for Derivative Instruments and Hedging Activities
–Impairment. The Supplementary Document proposes that
impairment would be measured based on expected credit
losses for the life of the instrument. For specific instruments
where collectability becomes so uncertain that the entity’s
credit risk management objective changes from receiving
regular principal and interest payments to recovery of the
collateral, the financial asset will be classified in a “bad
book.” For these instruments, impairment will be recognized
immediately. All other instruments will be classified by
portfolio in a “good book.” For these instruments, impairment
will be recognized at the greater of (l) the expected credit
losses proportionally over the life of the portfolio or (2) the
expected credit losses within the foreseeable future (but not
less than 12 months).
Recent Accounting Pronouncements
See Note 1 Accounting Policies in the Notes To Consolidated
Financial Statements in Item 8 of this Report for information
on new accounting pronouncements that were effective in
2009, 2010 or became effective on January 1, 2011.
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