eTrade 2008 Annual Report Download - page 108

FSP No. FAS 140-4 and FIN 46R-8—Disclosures by Public Entities (Enterprises) About Transfers of Financial
Assets and Interests in Variable Interest Entities
In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46R-8, Disclosures by Public Entities
(Enterprises) About Transfers of Financial Assets and Interests in Variable Interest Entities (“FSP No. FAS
140-4 and FIN 46R-8”).FSP No. FAS 140-4 and FIN 46R-8 amends the disclosure requirements of SFAS
No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and FIN
46R and is effective for the first reporting period ending after December 15, 2008, or December 31, 2008 for the
Company. The adoption of FSP No. FAS 140-4 and FIN 46R-8 did not have a material impact on the Company’s
financial condition, results of operations or cash flows.
FSP No. EITF 99-20-1—Amendments to the Impairment Guidance of EITF Issue No. 99-20
In January 2009, the FASB issued FSP No. EITF 99-20-1, Amendments to the Impairment Guidance of
EITF Issue No. 99-20 (“FSP No. EITF 99-20-1”). FSP No. EITF 99-20-1 amends the impairment guidance in
EITF No. 99-20 to align impairment guidance in EITF 99-20 with that in SFAS No. 115 and related impairment
guidance. FSP No. EITF 99-20-1 applies to beneficial interests within the scope of EITF 99-20 and is effective
for periods ending after December 15, 2008, or December 31, 2008 for the Company. The adoption of FSP No.
EITF 99-20-1 did not have a material impact on the Company.
Staff Accounting Bulletin (“SAB”) No. 109—Written Loan Commitments Recorded at Fair Value Through
Earnings
In November 2007, the SEC issued Staff Accounting Bulletin No. 109, Written Loan Commitments
Recorded at Fair Value Through Earnings (“SAB No. 109”), which became effective for the Company on
January 1, 2008. SAB No. 109 supersedes SAB No. 105, Application of Accounting Principles to Loan
Commitments (“SAB No. 105”),and states, consistent with the guidance in SFAS No. 156 and SFAS No. 159,
that the expected net future cash flows related to the associated servicing of the loan should be included in the
measurement of all written loan commitments that are accounted for at fair value through earnings. SAB No. 109
retains the view expressed in SAB No. 105 that internally developed intangible assets (such as customer
relationship intangible assets) should not be recorded as part of the fair value of a derivative loan commitment
and broadens its application to all written loan commitments that are accounted for at fair value through earnings.
The Company adopted this statement on January 1, 2008 and the impact of adoption was not material to its
financial condition, results of operations or cash flows.
NOTE 2—BUSINESS COMBINATIONS
The Company did not complete any business combinations in 2008 or 2007. On August 1, 2006, the
Company completed its acquisition of RAA, a Dallas, Texas-based investment advisor managing over $1 billion
in assets. The aggregate purchase price of approximately $24.9 million included $19.8 million, or 0.8 million
shares, in common stock issued and $5.1 million in cash. At acquisition, the purchase price included
approximately $0.1 million in net assets acquired, $9.5 million in customer list and other intangibles and $1.6
million held in escrow, with the remaining $13.7 million recorded as goodwill. The purchase price has been
allocated to the net assets acquired and the liabilities assumed based on their estimated fair values at the date of
acquisition. The results of operations of each are included in the Company’s consolidated statement of income
from the date of the acquisition.
The Company subsequently sold RAA in 2008. The sale of RAA did not qualify as a discontinued
operation. For additional information, see Note 4—Facility Restructuring and Other Exit Activities.
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