SunTrust 2011 Annual Report Download - page 128
Download and view the complete annual report
Please find page 128 of the 2011 SunTrust 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.Notes to Consolidated Financial Statements (Continued)
112
not available. For additional information on the Company’s valuation of its assets and liabilities held at fair value, see Note 19,
“Fair Value Election and Measurement.”
Accounting Policies Recently Adopted and Pending Accounting Pronouncements
In April 2011, the FASB issued ASU 2011-02, “Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring
Is a Troubled Debt Restructuring.” The ASU provides additional guidance to assist creditors in determining whether a modification
of a receivable meets the criteria to be considered a TDR, both for purposes of recognizing loan losses and additional disclosures
regarding TDRs. A modification of a credit arrangement constitutes a TDR if the debtor is experiencing financial difficulties and
the Company grants a concession to the debtor that it would not otherwise consider. The clarifications for classification apply to
all restructurings occurring on or after January 1, 2011. The measurement of impairment for those newly identified TDRs was
applied prospectively beginning on July 1, 2011. The related disclosures, which were previously deferred by ASU 2011-01, were
required for the interim reporting period ending September 30, 2011 and subsequent reporting periods. The required disclosures
and impact as a result of adoption are included in Note 6, “Loans.” The adoption of the ASU did not have a significant impact on
the Company’s financial position, results of operations, or EPS.
In April 2011, the FASB issued ASU 2011-03, “Transfers and Servicing (Topic 860): Reconsideration of Effective Control for
Repurchase Agreements.” A repurchase agreement is a transaction in which a company sells financial instruments to a buyer,
typically in exchange for cash, and simultaneously enters into an agreement to repurchase the same or substantially the same
financial instruments from the buyer at a stated price plus accrued interest at a future date. The determination of whether the
transaction is accounted for as a sale or a collateralized financing is determined by assessing whether the seller retains effective
control of the financial instrument. The ASU changes the assessment of effective control by removing the criterion that requires
the seller to have the ability to repurchase or redeem financial assets with substantially the same terms, even in the event of default
by the buyer and the collateral maintenance implementation guidance related to that criterion. The Company will apply the new
guidance to repurchase agreements entered into or amended after January 1, 2012. The adoption of the ASU did not have a
significant impact on the Company’s financial position, results of operations, or EPS.
In May 2011, the FASB issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” The primary purpose of the ASU is to conform the language
in the fair value measurements guidance in U.S. GAAP and IFRS. The ASU also clarifies how to apply existing fair value
measurement and disclosure requirements. Further, the ASU requires additional disclosures about transfers between level 1 and
2 of the fair value hierarchy, quantitative information for level 3 inputs, and the level of the fair value measurement hierarchy for
items that are not measured at fair value in the statement of financial position but for which the fair value is required to be disclosed.
The ASU is effective for the interim reporting period ending March 31, 2012. The Company has adopted the standard as of January
1, 2012. The adoption did not have a significant impact on the Company’s financial position, results of operations, or EPS.
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.”
The ASU requires presentation of the components of comprehensive income in either a continuous statement of comprehensive
income or two separate but consecutive statements. The update does not change the items presented in OCI and does not affect
the calculation or reporting of EPS. In December 2011, the FASB issued ASU 2011-12, "Comprehensive Income (Topic 220):
Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items out of Accumulated Other
Comprehensive Income in Accounting Standards update No. 2011-05," which deferred the effective date for the amendments to
the reclassification of items out of AOCI. The guidance, with the exception of reclassification adjustments, is effective on January 1,
2012 and must be applied retrospectively for all periods presented. The Company has adopted the standard as of January 1, 2012.
The adoption did not have an impact on the Company’s financial position, results of operations, or EPS.
In September 2011, the FASB issued ASU 2011-08, “Intangibles-Goodwill and Other (Topic 350): Testing Goodwill for
Impairment.” The ASU amends interim and annual goodwill impairment testing requirements. Under the ASU, an entity is not
required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that the fair value
of a reporting unit is less than its carrying amount. The more likely than not threshold is defined as having a likelihood of more
than 50 percent. The guidance is effective for annual and interim goodwill impairment tests beginning January 1, 2012. The
Company has adopted the standard as of January 1, 2012 and will apply the new guidance to future goodwill impairment testing,
but the Company does not expect the standard to have a substantive impact on its goodwill impairment evaluation.
In December 2011, the FASB issued ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities."
The ASU requires additional disclosures about financial instruments and derivative instruments that are offset or subject to an
enforceable master netting arrangement or similar agreement. The ASU is effective for the interim reporting period ending March
31, 2013 with retrospective disclosure for all comparative periods presented. The Company is evaluating the impact of the ASU;
however, it is not expected to materially impact the Company's financial position, results of operations, or EPS.