Ameriprise 2008 Annual Report Download - page 129
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review of the valuation assumptions for products of RiverSource Life companies for the year ended December 31, 2007 and
2006 were as follows:
Benefits,
Claims, Losses,
Other and Settlement Amortization Distribution
Pretax Benefit (Charge) Premiums Revenues Expenses of DAC Expenses Total
(in millions)
2008 period $ 2 $ 95 $ 90 $ (82) $ 1 $ 106
2007 period — (2) (12) (16) — (30)
2006 period — (1) (12) 38 — 25
The balances of and changes in DAC were as follows:
2008 2007 2006
(in millions)
Balance at January 1 $ 4,503 $ 4,499 $ 4,182
Cumulative effect of accounting change 36 (204) —
Capitalization of acquisition costs 648 771 744
Amortization, excluding impacts of valuation assumptions review and
valuation system conversion (851) (535) (510)
Amortization, impact of valuation assumptions review and valuation
system conversion (82) (16) 38
Impact of change in net unrealized securities losses (gains) 228 (12) 45
Balance at December 31 $ 4,482 $ 4,503 $ 4,499
The balances of and changes in DSIC were as follows:
2008 2007 2006
(in millions)
Balance at January 1 $ 511 $ 452 $ 370
Cumulative effect of accounting change 9 (11) —
Capitalization of sales inducements 87 124 126
Amortization, excluding impacts of valuation assumptions review and
valuation system conversion (115) (56) (48)
Amortization, impact of valuation assumptions review and valuation
system conversion (6) 3 —
Impact of change in net unrealized securities losses (gains) 32 (1) 4
Balance at December 31 $ 518 $ 511 $ 452
Effective January 1, 2008, the Company adopted SFAS 157 and recorded as a cumulative change in accounting principle a
pretax increase of $36 million and $9 million to DAC and DSIC, respectively. See Note 3 and Note 18 for additional
information regarding SFAS 157.
Effective January 1, 2007, the Company adopted SOP 05-1 and recorded as a cumulative change in accounting principle a
pretax reduction of $204 million and $11 million to DAC and DSIC, respectively.
9. Goodwill and Other Intangibles
Goodwill and other intangible assets deemed to have indefinite lives are not amortized but are instead subject to impairment
tests. For the years ended December 31, 2008, 2007 and 2006 the tests did not indicate impairment. Identifiable intangible
assets with indefinite useful lives acquired during the year ended December 31, 2008 included contracts of $9 million and
trade name assets of $10 million. The gross carrying amount of these assets was $19 million as of December 31, 2008. As of
December 31, 2007, the Company did not have any identifiable intangible assets with indefinite useful lives.
106