Sallie Mae 2010 Annual Report Download - page 114

2. Significant Accounting Policies (Continued)
The following table summarizes the change in the consolidated balance sheet resulting from the
consolidation of the off-balance sheet securitization trusts upon the adoption of the new consolidation
accounting guidance.
(Dollars in millions)
At January 1,
2010
FFELP Stafford Loans (net of allowance of $15) ............................. $ 5,500
FFELP Consolidation Loans (net of allowance of $10) . . ...................... 14,797
Private Education Loans (net of allowance of $524) .......................... 12,341
Total student loans ................................................. 32,638
Restricted cash and investments ......................................... 1,041
Other assets ........................................................ 1,370
Total assets consolidated ............................................. 35,049
Long-term borrowings ................................................ 34,403
Other liabilities ..................................................... 6
Total liabilities consolidated .......................................... 34,409
Net assets consolidated on balance sheet ................................... 640
Less: Residual Interest removed from balance sheet .......................... 1,828
Cumulative effect of accounting change before taxes .......................... (1,188)
Tax effect ......................................................... 434
Cumulative effect of accounting change after taxes recorded to retained earnings ..... $ (754)
Use of Estimates
Our financial reporting and accounting policies conform to generally accepted accounting principles in
the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates. Key accounting policies that include significant judgments and estimates include valuation and
income recognition related to allowance for loan losses, loan effective interest rate method (student loan and
debt premiums and discounts), fair value measurements, goodwill and acquired intangible asset impairment
assessments, and derivative accounting.
Fair Value Measurement
We use estimates of fair value in applying various accounting standards for our financial statements. Fair
value measurements are used in one of four ways:
• In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of
income;
• In the consolidated balance sheet with changes in fair value recorded in the accumulated other
comprehensive income section of the consolidated statement of changes in stockholders’ equity;
F-11
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)