eTrade 2012 Annual Report Download - page 122

Reconsideration of Effective Control for Repurchase Agreements
In April 2011, the FASB amended the accounting guidance for repurchase agreements. The amendments
change the effective control assessment by removing the criterion that required the transferor to have the ability
to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the
transferee, and the collateral maintenance guidance related to that criterion. The amended accounting guidance
became effective January 1, 2012 for the Company, and was applied prospectively to transactions or
modifications of existing transactions that occurred on or after January 1, 2012. The adoption of the amended
accounting guidance did not have a material impact on the Company’s financial condition, results of operations,
or cash flows.
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs
In May 2011, the FASB amended the accounting and disclosure guidance related to fair value
measurements. The amended guidance will result in common fair value measurement and disclosure
requirements in GAAP and IFRSs. The amended guidance changes the descriptions of certain requirements in
GAAP for measuring fair value and the requirements for disclosing information about fair value measurement.
The amended accounting guidance became effective January 1, 2012 for the Company, and was applied
prospectively. The adoption of the amended guidance did not have a material impact on the Company’s financial
condition, results of operations, or cash flows and the Company’s disclosures reflect the adoption of the amended
disclosure guidance in Note 3—Fair Value Disclosures.
Presentation of Comprehensive Income
In June 2011, the FASB amended the presentation guidance for comprehensive income. Among other
presentation changes, the amended guidance provides the option to present the total of comprehensive income,
the components of net income, and the components of other comprehensive income either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. The amended presentation
guidance became effective January 1, 2012 for the Company. The Company’s presentation of the total of
comprehensive income, the components of net income and the components of other comprehensive income in
two separate but consecutive statements reflects the adoption of the amended presentation guidance.
Testing Goodwill for Impairment
In September 2011, the FASB amended the guidance on testing goodwill for impairment. The amended
guidance provides an option to perform a qualitative assessment to determine whether it is more likely than not
that the fair value of a reporting unit is impaired as a basis for determining if further testing of goodwill for
impairment is necessary. The amended guidance became effective January 1, 2012 for the Company. The
adoption of the amended accounting guidance did not have a material impact on the Company’s financial
condition, results of operations, or cash flows.
Disclosures about Offsetting Assets and Liabilities
In December 2011, the FASB amended the disclosure guidance about offsetting assets and liabilities. The
amended disclosure guidance will enable users of the Company’s financial statements to evaluate the effect or
potential effect of netting arrangements on the Company’s financial position. This includes the effect or potential
effect of rights of setoff between recognized assets and recognized liabilities within the scope of amended
disclosure guidance, such as derivative instruments, repurchase agreements and reverse repurchase agreements,
and securities borrowing and securities lending transactions. The amended disclosure guidance became effective
for annual and interim periods beginning on January 1, 2013 for the Company and will be applied retrospectively
for all comparative periods presented. The Company’s disclosures will reflect the adoption of the amended
disclosure guidance in the Form 10-Q for the quarterly period ending March 31, 2013.
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