Ameriprise 2011 Annual Report Download - page 130

holders, not Ameriprise Financial, ultimately will receive the benefits or absorb the losses associated with the assets and
liabilities of the CDOs. Subsequent to the adoption, the net change in fair value of the assets and liabilities of the CDOs
will be recorded as net income attributable to noncontrolling interests and as an adjustment to appropriated retained
earnings of consolidated investment entities. See Note 4 for additional information related to the application of the
amended VIE consolidation model and the required disclosures.
Recognition and Presentation of Other-Than-Temporary Impairments (‘‘OTTI’’)
In April 2009, the FASB updated the accounting standards for the recognition and presentation of other-than-temporary
impairments. The standard amends existing guidance on other-than-temporary impairments for debt securities and requires
that the credit portion of other-than-temporary impairments be recorded in earnings and the noncredit portion of losses be
recorded in other comprehensive income when the entity does not intend to sell the security and it is more likely than not
that the entity will not be required to sell the security prior to recovery of its cost basis. The standard requires separate
presentation of both the credit and noncredit portions of other-than-temporary impairments on the financial statements
and additional disclosures. This standard is effective for interim and annual reporting periods ending after June 15, 2009,
with early adoption permitted for periods ending after March 15, 2009. At the date of adoption, the portion of previously
recognized other-than-temporary impairments that represent the noncredit related loss component shall be recognized as a
cumulative effect of adoption with an adjustment to the opening balance of retained earnings with a corresponding
adjustment to accumulated other comprehensive income. The Company adopted the standard in the first quarter of 2009
and recorded a cumulative effect increase to the opening balance of retained earnings of $132 million, net of DAC and
DSIC amortization, certain benefit reserves and income taxes, and a corresponding increase to accumulated other
comprehensive loss, net of impacts to DAC and DSIC amortization, certain benefit reserves and income taxes. See Note 5
for the required disclosures.
Future Adoption of New Accounting Standards
Balance Sheet
In December 2011, the FASB updated the accounting standards to require new disclosures about offsetting assets and
liabilities. The standard requires an entity to disclose both gross and net information about instruments and transactions
eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to
a master netting arrangement. The standard is effective for interim and annual periods beginning on or after January 1,
2013 on a retrospective basis. The Company is currently evaluating the impact of the standard on its consolidated results
of operations and financial condition.
Comprehensive Income
In June 2011, the FASB updated the accounting standards related to the presentation of comprehensive income. The
standard requires entities to present all nonowner changes in stockholders’ equity either in a single continuous statement
of comprehensive income or in two separate but consecutive statements. The amendments do not affect how earnings per
share is calculated or presented. The standard is effective for interim and annual periods beginning after December 15,
2011. The standard is to be applied retrospectively. The adoption of the standard will not impact the Company’s
consolidated results of operations and financial condition.
Fair Value
In May 2011, the FASB updated the accounting standards related to fair value measurement and disclosure requirements.
The standard requires entities, for assets and liabilities measured at fair value in the statement of financial position which
are Level 3 fair value measurements, to disclose quantitative information about unobservable inputs and assumptions used
in the measurements, a description of the valuation processes in place, and a qualitative discussion about the sensitivity
of the measurements to changes in unobservable inputs and interrelationships between those inputs if a change in those
inputs would result in a significantly different fair value measurement. In addition, the standard requires disclosure of fair
value by level within the fair value hierarchy for each class of assets and liabilities not measured at fair value in the
statement of financial position but for which the fair value is disclosed. The standard is effective for interim and annual
periods beginning on or after December 15, 2011. The adoption of the standard is not expected to have a material impact
on the Company’s consolidated results of operations and financial condition.
Transfers and Servicing: Reconsideration of Effective Control for Repurchase Agreements
In April 2011, the FASB updated the accounting standards related to accounting for repurchase agreements and other
similar agreements. The standard modifies the criteria for determining when these transactions would be accounted for as
secured borrowings as opposed to sales. The standard is effective prospectively for new transfers and existing transactions
that are modified in the first interim or annual period beginning on or after December 15, 2011. The adoption of the
standard is not expected to have a material impact on the Company’s consolidated results of operations and financial
condition.
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