Wells Fargo 2011 Annual Report Download - page 97

Current Accounting Developments
The following accounting pronouncements have been issued by
the FASB but are not yet effective:
Accounting Standards Update (ASU or Update) 2011-11,
Disclosures about Offsetting Assets and Liabilities;
ASU 2011-05, Presentation of Comprehensive Income;
ASU 2011-12, Deferral of the Effective Date for
Amendments to the Presentation of Reclassifications of
Items Out of Accumulated Other Comprehensive Income in
Accounting Standards Update No. 2011-05;
ASU 2011-04, Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP
and IFRSs; and
ASU 2011-03, Reconsideration of Effective Control for
Repurchase Agreements.
ASU 2011-11 expands the disclosure requirements for financial
instruments and derivatives that may be offset in accordance
with enforceable master netting agreements or similar
arrangements. The disclosures are required regardless of
whether the instruments have been offset (or netted) in the
statement of financial position. Under ASU 2011-11, companies
must describe the nature of offsetting arrangements and provide
quantitative information about those agreements, including the
gross and net amounts of financial instruments that are
recognized in the statement of financial position. These changes
are effective for us in first quarter 2013 with retrospective
application. This Update will not affect our consolidated
financial results since it amends only the disclosure
requirements for offsetting financial instruments.
ASU 2011-05 eliminates the option for companies to include
the components of other comprehensive income in the statement
of changes in stockholders’ equity. This Update requires entities
to present the components of comprehensive income in either a
single statement or in two separate statements, with the
statement of other comprehensive income (OCI) immediately
following the statement of income. This Update also requires
companies to present amounts reclassified out of OCI and into
net income on the face of the statement of income. In December
2011, the FASB issued ASU 2011-12, which defers indefinitely
the requirement to present reclassification adjustments on the
statement of income. The remaining provisions are effective for
us in first quarter 2012 with retrospective application. Early
adoption is permitted. This Update will not affect our
consolidated financial results as it amends only the presentation
of comprehensive income.
ASU 2011-04 modifies accounting guidance and expands
existing disclosure requirements for fair value measurements.
This Update clarifies how fair values should be measured for
instruments classified in stockholders’ equity and under what
circumstances premiums and discounts should be applied in fair
value measurements. This Update also permits entities to
measure fair value on a net basis for financial instruments that
are managed based on net exposure to market risks and/or
counterparty credit risk. ASU 2011-04 requires new disclosures
for financial instruments classified as Level 3, including: 1)
quantitative information about unobservable inputs used in
measuring fair value, 2) qualitative discussion of the sensitivity
of fair value measurements to changes in unobservable inputs,
and 3) a description of valuation processes used. This Update
also requires disclosure of fair value levels for financial
instruments that are not recorded at fair value but for which fair
value is required to be disclosed. This guidance is effective for us
in first quarter 2012 with prospective application. Early adoption
is not permitted. We will expand our fair value disclosures upon
adoption of this Update, but we do not expect the measurement
clarifications will have a material effect on our consolidated
financial statements.
ASU 2011-03 amends the criteria companies use to determine if
repurchase and similar agreements should be accounted for as
sales or financings. Specifically, this Update removes the
criterion for transferors to have the ability to meet contractual
obligations through collateral maintenance provisions, even if
transferees fail to return transferred assets pursuant to the
agreements. This Update is effective for us in first quarter 2012
with prospective application to new transactions and existing
transactions modified on or after January 1, 2012. Early adoption
is not permitted. We do not expect this Update will have a
material effect on our consolidated financial statements.
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