eTrade 2001 Annual Report Download - page 123

Derivative gains and losses not considered highly effective in hedging the change in fair value or expected cash flows of the hedged
item are recognized in the consolidated statement of operations as gains on the bank loans held for sale and other securities-net as
these derivatives do not qualify for hedge accounting under SFASNo. 133.
Prior to October 1, 2000, unrealized gains and losses on financial derivatives used for hedging purposes were generally not required to
be reported in the consolidated balance sheet. For interest rate swaps, the net interest received or paid was treated as an adjustment to
the interest income or expense related to the hedged assets or obligations in the period in which such amounts were due. Premiums and
fees associated with interest rate caps were amortized to interest income or expense on a straight-line basis over the lives of the
contracts. For instruments that did not qualify as hedges, realized and unrealized gains and losses were recognized in the statement of
operations as gains on the bank loans held for sale and other securities-net in our consolidated statements of operations.
Comprehensive Income— The Company’ s comprehensive income is comprised of net income, foreign currency cumulative translation
adjustments, unrealized gains and losses on available-for-sale mortgage-backed and investment securities, and the effective portion of
the unrealized gains and losses on financial derivatives in cash flow hedge relationships, net of reclassification adjustments and related
taxes. Comprehensive income is reflected in the consolidated statements of shareowners’ equity.
The components of accumulated other comprehensive income (loss) are as follows (in thousands):
December31, 2001 September30, 2000
Unrealized gains (losses) on available-for-sale securities $ (47,048 ) $ 66,334
Unrealized losses on derivative instruments (148,252 ) —
Foreign currency translation (2,077 ) 388
Accumulated other comprehensive income (loss) $ (197,377 ) $ 66,722
107
Table of Contents
Segment Information— The Company reports its segment operating results consistent with the internal organization that is used by
management for making operating decisions and assessing performance.
New Accounting Standards —In September 2000, the FASB issued SFAS No. 140 , Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities . SFAS No. 140 replaces SFAS No. 125 , Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities . SFAS No. 140 revises the standards for accounting for securitizations and
other transfers of financial assets and collateral and requires certain disclosures, but it carries over most of SFAS No. 125’ s provisions
without reconsideration. SFAS No. 140 was effective for transactions after March 31, 2001. The effect of the adoption was not
material to its consolidated financial statements.
In June 2001, the FASB issued SFAS No. 141 and SFAS No. 142, effective for fiscal year ending December31, 2002. The effects of
the adoption of SFAS No. 141 and SFAS No. 142 are discussed under the section, Goodwill and Other Intangibles , above.
In October 2001, the FASB issued SFAS No. 144, Impairment on Disposal of Long-Lived Assets , effective for fiscal year December
2002. EDGAR Online, Inc.