Ameriprise 2014 Annual Report Download - page 123

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.
The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting
principles (‘‘GAAP’’).
In the Consolidated Statements of Operations, the Company reclassified certain fixed wholesaling costs from distribution
expenses to general and administrative expense on a retroactive basis to improve consistency in its presentation of
wholesaling distribution expense. The amount reclassified for the years ended December 31, 2013 and December 31,
2012 was $111 million and $107 million, respectively.
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.
2. Summary of Significant Accounting Policies
Principles of Consolidation
Voting interest entities (‘‘VOEs’’) are those entities that do not qualify as a VIE. The Company consolidates VOEs in which it
holds a greater than 50% voting interest. The Company generally accounts for entities using the equity method when it
holds a greater than 20% but less than 50% voting interest or when the Company exercises significant influence over the
entity. All other investments that are not reported at fair value as trading or Available-for-Sale securities are accounted for
under the cost method when the Company owns less than a 20% voting interest and does not exercise significant
influence.
The Company manages certain VOE property funds that are structured as limited partnerships that are not VIEs, for which
the Company is the general partner. As a general partner, the Company is presumed to control the limited partnership
unless the limited partners have the ability to dissolve the partnership or have substantive participating rights such as the
ability to remove the Company as general partner with a simple majority vote.
A VIE is an entity that either has equity investors that lack certain essential characteristics of a controlling financial interest
(including substantive voting rights, the obligation to absorb the entity’s losses, or the rights to receive the entity’s returns)
or has equity investors that do not provide sufficient financial resources for the entity to support its activities. An entity that
meets one of these criteria is assessed for consolidation under one of the following models:
• If the VIE is a registered money market fund, or is an investment company, or has the financial characteristics of an
investment company, and the following are true:
(i) the reporting entity does not have an explicit or implicit obligation to fund the investment company’s losses; and
(ii) the investment company is not a securitization entity, asset backed financing entity, or an entity previously
considered a qualifying special purpose entity,
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