SunTrust 2013 Annual Report Download - page 124

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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, mortgage banking, and trust and investment services.
Additional subsidiaries provide asset management, securities brokerage, and capital market services. SunTrust operates
primarily within Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia.
In certain businesses, SunTrust also operates in select markets nationally. SunTrust provides clients with a selection of
technology-based banking channels, including the internet, mobile, ATMs, and 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 2013: Consumer Banking and Private
Wealth Management, Wholesale Banking, and Mortgage Banking, with the other activities included in Corporate Other. For
additional information on the Company’s business segments, see Note 20, “Business Segment Reporting.”
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 the Company's 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 the Company 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 in the Consolidated Balance Sheets 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.
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. 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.
Cash and Cash Equivalents
Cash and cash equivalents include cash and due from banks, interest-bearing deposits in other banks, Fed funds sold, securities
borrowed and 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.