SunTrust 2011 Annual Report Download - page 120
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Notes to Consolidated Financial Statements
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
General
SunTrust, one of the nation's largest commercial banking organizations, is a financial services holding company with its headquarters
in Atlanta, Georgia. Through its principal subsidiary, SunTrust Bank, the Company offers a full line of financial services for
consumers and businesses including deposit, credit, and trust and investment services. Additional subsidiaries provide mortgage
banking, asset management, securities brokerage, capital market services, and credit-related insurance. SunTrust operates primarily
within Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia. SunTrust
provides clients with a selection of technology-based banking channels, including the internet, ATMs, and twenty-four hour
telebanking. SunTrust’s client base encompasses a broad range of individuals and families, businesses, institutions, and
governmental agencies. Within its geographic footprint, SunTrust operated under the following business segments during 2011
and 2010: Retail Banking, Diversified Commercial Banking, CRE, CIB, Mortgage, and W&IM, with the remainder in Corporate
Other and Treasury.
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of all significant
intercompany accounts and transactions.
The Company holds VIs, which are contractual ownership or other interests that change with changes in the fair value of a VIE's
net assets. The Company consolidates a VIE if it is the primary beneficiary, which is the party that has both the power to direct
the activities that most significantly impact the financial performance of the VIE and the obligation to absorb losses or rights to
receive benefits through its VIs that could potentially be significant to the VIE. To determine whether or not a VI held by the
Company could potentially be significant to the VIE, both qualitative and quantitative factors regarding the nature, size, and form
of our involvement with the VIE are considered. The assessment of whether or not the Company is the primary beneficiary of a
VIE is performed on an on-going basis. The Company consolidates VOEs, which are entities that are not VIEs that are controlled
through the Company's equity interests.
Investments in companies which are not VIEs, or where SunTrust is not the primary beneficiary of a VIE, that the Company has
the ability to exercise significant influence over operating and financing decisions, are accounted for using the equity method of
accounting. These investments are included in other assets at cost, adjusted to reflect the Company's portion of income, loss or
dividends of the investee. Unconsolidated equity investments that do not meet the criteria to be accounted for under the equity
method are accounted for under the cost method. Cost method investments are included in other assets in the Consolidated Balance
Sheets and dividends received or receivable from these investments are included as a component of other noninterest income in
the Consolidated Statements of Income/(Loss).
Results of operations of companies purchased are included from the date of acquisition. Results of operations associated with
companies or net assets sold are included through the date of disposition. The Company reports any noncontrolling interests in its
subsidiaries in the equity section of the Consolidated Balance Sheets and separately presents the income or loss attributable to the
noncontrolling interest of a consolidated subsidiary in its Consolidated Statements of Income/(Loss). Assets and liabilities of
purchased companies are initially recorded at estimated fair values at the date of acquisition.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the 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 vary from these
estimates. Certain reclassifications have been made to prior period amounts to conform to the current period presentation.
The Company evaluated subsequent events through the date its financial statements were issued. For additional information on
the Company's subsequent events, see Note 25, "Subsequent Event."
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks, interest-bearing deposits in other banks, Fed funds sold, and securities
purchased under agreements to resell. Cash and cash equivalents have maturities of three months or less, and accordingly, the
carrying amount of these instruments is deemed to be a reasonable estimate of fair value.