Sallie Mae 2011 Annual Report Download - page 119

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (Continued)
January 1, 2010. The historical cost basis is the basis that would exist if these securitization trusts had remained
on-balance sheet since they settled. The new guidance did not change the accounting of any other VIEs in which
we had a variable interest as of January 1, 2010.
After the adoption of the new accounting guidance, our results of operations no longer reflect securitization,
servicing and Residual Interest revenue related to these securitization trusts, but instead report interest income,
provisions for loan losses associated with the securitized assets and interest expense associated with the debt
issued from the securitization trusts to third parties, consistent with our accounting treatment of prior on-balance
sheet securitization trusts.
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)
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;
• In the consolidated balance sheet for instruments carried at lower of cost or fair value with impairment
charges recorded in the consolidated statement of income; and
• In the notes to the financial statements.
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