Travelers 2015 Annual Report Download - page 156

Goodwill and Other Intangible Assets Impairments
See note 1 of notes to the consolidated financial statements herein for a discussion of impairments
of goodwill and other intangible assets.
OTHER UNCERTAINTIES
For a discussion of other risks and uncertainties that could impact the Company’s results of
operations or financial position, see note 16 of notes to the consolidated financial statements and
‘‘Item 1A—Risk Factors’’ herein.
FUTURE APPLICATION OF ACCOUNTING STANDARDS
See note 1 of the notes to the consolidated financial statements herein for a discussion of recently
issued accounting standards updates.
The Company is required to prepare its financial statements in accordance with U.S. Generally
Accepted Accounting Principles (GAAP), as promulgated by the Financial Accounting Standards Board
(FASB). Since 2002 the Securities and Exchange Commission (SEC) has been evaluating whether, when
and how International Financial Reporting Standards (IFRS) should be incorporated into the U.S.
financial reporting system. This initiative resulted in a bilateral convergence program of the FASB and
the International Accounting Standards Board (IASB) that is winding down. As a result of this
initiative, the FASB has implemented a three-part strategy for seeking greater comparability in
accounting standards internationally going forward that is not exclusively based on coordination with
the IASB:
1. Developing high-quality GAAP standards;
2. Actively participating in the development of IFRS; and
3. Enhancing relationships and communications with other national standards setters.
More recently, the SEC is seeking feedback on other alternatives that might be explored in
addition to further incorporation of or alignment with IFRS. Allowing U.S. companies to provide
voluntary, supplemental IFRS-based financial information—in addition to the required GAAP financial
statements—was cited as an example of such an alternative. Under this concept, the IFRS information
would not be considered ‘‘non-GAAP’’ information. As a result, U.S. companies would not be required
to reconcile the IFRS information with the required GAAP financial statements.
As the formal bilateral convergence program winds down, the FASB and IASB are expected to
complete the projects that address the following significant areas of accounting:
Accounting for Insurance Contracts: In February 2014, the FASB discontinued its full insurance
project and instead decided to make targeted changes to U.S. GAAP for insurance contracts. The
FASB decided to retain the current measurement and presentation of property and casualty insurance
contracts in the financial statements and issue new, expanded disclosure requirements that are effective
with 2016 year-end reporting.
Accounting for Financial Instruments: In 2014, the IASB issued a final financial instruments
standard with an effective date of January 1, 2018. The FASB instead addressed the financial
instruments project in three phases; recognition and measurement, impairment, and hedge accounting.
In January 2016, the FASB issued an accounting standards update to financial instruments guidance for
recognition and measurement, including impairment guidance related to equity investments, with an
effective date of January 1, 2018. The targeted changes essentially achieved convergence in the major
areas of recognition and measurement for equity investments. The FASB has tentatively decided on a
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