Ameriprise 2013 Annual Report Download - page 133

Other Revenues
Other revenues primarily include charges assessed on fixed and variable universal life insurance which consist of cost of
insurance charges, net of reinsurance and cost of reinsurance for UL insurance products and variable annuity guaranteed
benefit rider charges. These charges are recognized as revenue when assessed. The Company also records revenue related
to consolidated pooled investment vehicles managed by Threadneedle. These revenues primarily represent rental income of
managed properties and are recognized on a straight line basis over the term of the lease.
3. Recent Accounting Pronouncements
Adoption of New Accounting Standards
Comprehensive Income
In February 2013, the Financial Accounting Standards Board (‘‘FASB’’) updated the accounting standard related to
comprehensive income. The update requires entities to provide information about significant amounts reclassified out of
accumulated other comprehensive income (‘‘AOCI’’). The standard is effective for interim and annual periods beginning
after December 15, 2012 and is required to be applied prospectively. The Company adopted the standard in the first
quarter of 2013. The adoption of the standard did not have any effect on the Company’s consolidated results of
operations and financial condition. See Note 13 for the required disclosures.
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 certain financial instruments
and transactions subject to master netting arrangements (or similar agreements) or eligible for offset in the statement of
financial position. The standard is effective for interim and annual periods beginning on or after January 1, 2013 on a
retrospective basis. The Company adopted the standard in the first quarter of 2013. The adoption of the standard did not
have any effect on the Company’s consolidated results of operations and financial condition. See Note 15 for the required
disclosures.
Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts
In October 2010, the FASB updated the accounting standard for DAC. Under this new standard, only the following costs
incurred in the acquisition of new and renewal insurance contracts are capitalizable as DAC: (i) incremental direct costs of
a successful contract acquisition, (ii) portions of employees’ compensation and benefits directly related to time spent
performing acquisition activities (that is, underwriting, policy issuance and processing, medical and inspection, and contract
selling) for a contract that has been acquired, (iii) other costs related to acquisition activities that would not have been
incurred had the acquisition of the contract not occurred, and (iv) advertising costs that meet the capitalization criteria in
other GAAP guidance for certain direct-response marketing. All other acquisition related costs are expensed as incurred.
The Company retrospectively adopted the new standard on January 1, 2012. The cumulative effect of the adoption
reduced retained earnings by $1.4 billion after-tax and increased AOCI by $113 million after-tax, totaling to a $1.3 billion
after-tax reduction in total equity at January 1, 2012.
Future Adoption of New Accounting Standards
Receivables — Troubled Debt Restructuring by Creditors
In January 2014, the FASB updated the accounting standard related to recognizing residential real estate obtained through
a repossession or foreclosure from a troubled debtor. The update clarifies the criteria for derecognition of the loan
receivable and recognition of the real estate property. The standard is effective for interim and annual periods beginning
after December 15, 2014 and can be applied under a modified retrospective transition method or a prospective transition
method. Early adoption is permitted. The adoption of the standard is not expected to have a material impact on the
Company’s consolidated results of operations and financial condition.
Investments — Equity Method and Joint Ventures
In January 2014, the FASB updated the accounting standard related to investments in qualified affordable housing
projects. The update allows for an accounting policy election to account for investments in qualified affordable housing
projects using the proportional amortization method if certain conditions are met. Under the proportional amortization
method, the investment in a qualified affordable housing project is amortized in proportion to the tax credits and other tax
benefits received. The net investment performance is recognized as a component of income tax expense (benefit). The
standard is effective for interim and annual periods beginning after December 15, 2014 and should be applied
retrospectively to all periods presented. Early adoption is permitted. The Company is currently evaluating the impact of the
standard on its consolidated results of operations and financial condition.
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