Ameriprise 2014 Annual Report Download - page 135

Transfers and Servicing
In June 2014, the FASB updated the accounting standards related to transfers and servicing. The update requires
repurchase-to-maturity transactions and linked repurchase financings to be accounted for as secured borrowings consistent
with the accounting for other repurchase agreements. The standard requires disclosures related to transfers of financial
assets accounted for as sales in transactions that are similar to repurchase agreements. The standard also requires
disclosures on the remaining contractual maturity of the agreements, disaggregation of the gross obligation by class of
collateral pledged and potential risks associated with the agreements and the related collateral pledged in repurchase
agreements, securities lending transactions, and repurchase-to-maturity transactions accounted for as secured borrowings.
The standard is effective for interim and annual periods beginning after December 15, 2014, except for the disclosure
requirements for repurchase-to-maturity transactions accounted for as secured borrowings which are effective for interim
periods beginning after March 15, 2015. Early adoption of the standard is prohibited. The standard requires entities to
present changes in accounting for transactions outstanding at the effective date as a cumulative-effect adjustment to
retained earnings as of the beginning of the period of adoption. As the Company does not have repurchase-to-maturity
transactions, the adoption of the standard is not expected to have a material impact on the Company’s consolidated
results of operations and financial condition.
Revenue from Contracts with Customers
In May 2014, the FASB updated the accounting standards for revenue from contracts with customers. The update provides
a five step revenue recognition model for all revenue arising from contracts with customers and affects all entities that
enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other
standards). The standard also updates the accounting for certain costs associated with obtaining and fulfilling a customer
contract. In addition, the standard requires disclosure of quantitative and qualitative information that enables users of
financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from
contracts with customers. The standard is effective for interim and annual periods beginning after December 15, 2016 and
early adoption is prohibited. The standard may be applied retrospectively for all periods presented or retrospectively with a
cumulative-effect adjustment at the date of adoption. The Company is currently evaluating the impact of the standard on
its consolidated results of operations and financial condition.
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 does not plan to elect the proportional
amortization method.
4. Variable Interest Entities
The Company provides asset management services to investment entities which are considered to be VIEs, such as CLOs,
hedge funds, property funds (pooled investment vehicles) and private equity funds (collectively, ‘‘investment entities’’),
which are sponsored by the Company. The Company consolidates certain CLOs and property funds (collectively,
‘‘consolidated investment entities’’). In addition, the Company invests in structured investments and affordable housing
partnerships which are considered VIEs which the Company does not consolidate. See Note 2 for further discussion of the
Company’s accounting policy on consolidation.
Non-Consolidated VIEs
The Company has determined that consolidation is not required for hedge funds and private equity funds which are
sponsored by the Company. The Company’s maximum exposure to loss with respect to its investment in these entities is
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