Ameriprise 2012 Annual Report Download - page 119

Notes to Consolidated Financial Statements
1. Basis of Presentation
Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide
financial planning, products and services that are designed to be utilized as solutions for clients’ cash and liquidity, asset
accumulation, income, protection and estate and wealth transfer needs. The foreign operations of Ameriprise
Financial, Inc. are conducted primarily through its subsidiary, Threadneedle Asset Management Holdings S` arl
(‘‘Threadneedle’’).
The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in
which it directly or indirectly has a controlling financial interest and variable interest entities (‘‘VIEs’’) in which it is the
primary beneficiary (collectively, the ‘‘Company’’). The income or loss generated by consolidated entities which will not be
realized by the Company’s shareholders is attributed to noncontrolling interests in the Consolidated Statements of
Operations. Noncontrolling interests are the ownership interests in subsidiaries not attributable, directly or indirectly, to
Ameriprise Financial, Inc. and are classified as equity within the Consolidated Balance Sheets. The Company, excluding
noncontrolling interests, is defined as ‘‘Ameriprise Financial.’’ All intercompany transactions and balances have been
eliminated in consolidation. See Note 4 for additional information related to VIEs.
The results of Securities America Financial Corporation and its subsidiaries (collectively, ‘‘Securities America’’) have been
presented as discontinued operations for all periods presented. The Company completed the sale of Securities America in
the fourth quarter of 2011. See Note 24 for additional information on discontinued operations.
The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting
principles (‘‘GAAP’’). Certain reclassifications of prior period amounts have been made to conform to the current
presentation.
In the fourth quarter of 2012, the Company made an adjustment to the model which values the reserves related to living
benefit guarantees primarily attributable to prior periods, which resulted in a $41 million pretax benefit, net of deferred
acquisition costs (‘‘DAC’’) and deferred sales inducement costs (‘‘DSIC’’) amortization of $11 million. In the fourth quarter
of 2012, the Company completed a review of its deferred tax balances. This review resulted in adjustments to the
Company’s deferred tax balances. In addition, as part of the review, the Company discovered tax return errors for prior
years which will be corrected. The net impact of the review resulted in a decrease of income tax expense of $16 million. In
the second quarter of 2012, the Company made a correction for a tax item related to securities lending activities primarily
attributable to prior periods, which resulted in a $32 million increase to tax expense. Management has determined that
the effect of these corrections is not material to all current and previously issued financial statements.
The Company evaluated events or transactions that may have occurred after the balance sheet date for potential
recognition or disclosure through the date the financial statements were issued.
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