Ameriprise 2015 Annual Report Download - page 133

Future Adoption of New Accounting Standards
Financial Instruments — Recognition and Measurement of Financial Assets and Financial Liabilities
In January 2016, the FASB updated the accounting standards on the recognition and measurement of financial
instruments. The update requires entities to carry marketable equity securities, excluding investments in securities that
qualify for the equity method of accounting, at fair value through net income. The update affects other aspects of
accounting for equity instruments, as well as the accounting for financial liabilities utilizing the fair value option. The update
eliminates the requirement to disclose the methods and assumptions used to estimate the fair value of financial assets or
liabilities held at cost on the balance sheet and requires entities to use the exit price notion when measuring the fair value
of financial instruments. The standard is effective for interim and annual periods beginning after December 15, 2017. Early
adoption is permitted for certain provisions. Generally, the update should be applied using a modified retrospective
approach by recording a cumulative-effect adjustment to equity at the beginning of the period of adoption. The Company is
currently evaluating the impact of the standard on its consolidated results of operations and financial condition.
Insurance — Disclosure about Short-Duration Contracts
In May 2015, the FASB updated the accounting standard for short-duration insurance contracts. The update requires
enhanced disclosures about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates,
methodologies and judgements in estimating claims and the timing, frequency and severity of claims. The standard is
effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after
December 15, 2016. Early adoption is permitted. The disclosures should be applied retrospectively by providing
comparative disclosures for each period presented, except for those requirements that apply only to the current period.
There will be no impact of the standard to the Company’s consolidated results of operations and financial condition.
Fair Value Measurement — Disclosures for Investments in Certain Entities That Calculate Net Asset Value per
Share (or Its Equivalent)
In May 2015, the FASB updated the accounting standards related to fair value measurement. The update applies to
investments that are measured at net asset value (‘‘NAV’’). The standard eliminates the requirement to categorize within
the fair value hierarchy all investments for which fair value is measured using the NAV per share as a practical expedient.
In addition, the update limits disclosures to investments for which the entity elected to measure the fair value using the
practical expedient rather than all eligible investments. The standard is effective for interim and annual periods beginning
after December 15, 2015. The standard should be applied retrospectively to all periods presented and early adoption is
permitted. The Company adopted the standard on January 1, 2016. There was no impact of the standard to the
Company’s consolidated results of operations and financial condition.
Interest — Imputation of Interest
In April 2015, the FASB updated the accounting standards related to debt issuance costs. The update requires that debt
issuance costs be presented on the balance sheet as a direct deduction from the carrying amount of debt. The update
does not impact the measurement or recognition of debt issuance costs. In August 2015, the FASB updated the guidance
to allow companies to make a policy election to exclude debt issuance costs for line-of-credit arrangements from the
standard. The standard is effective for interim and annual periods beginning after December 15, 2015. The standard is to
be applied on a retrospective basis to all periods presented. Early adoption of the standard is permitted. The Company
adopted the standard on January 1, 2016. The reclassification did not have a material impact on the Company’s
consolidated financial condition. There was no impact of the standard to the Company’s consolidated results of operations.
Consolidation
In February 2015, the FASB updated the accounting standard for consolidation. The update changes the accounting for
the consolidation model for limited partnerships and VIEs and excludes certain money market funds from the consolidation
analysis. Specific to the consolidation analysis of a VIE, the update clarifies consideration of fees paid to a decision maker
and amends the related party guidance. The standard is effective for periods beginning after December 15, 2015. Early
adoption is permitted, including adoption in an interim period. The standard may be applied using a modified retrospective
approach by recording a cumulative-effect adjustment to equity at the beginning of the period of adoption or applied
retrospectively. The Company adopted the standard on January 1, 2016 using the modified retrospective approach. The
adoption resulted in the deconsolidation of several collateralized loan obligations (‘‘CLOs’’) and all property funds with a
decrease of approximately $6.2 billion of assets, $4.9 billion of liabilities and $1.3 billion of equity (noncontrolling interests
and appropriated retained earnings of consolidated investment entities). Effective January 1, 2016, management fees the
Company earns for services provided to the deconsolidated CLOs and property funds are no longer eliminated in
consolidation.
In August 2014, the FASB updated the accounting standard related to consolidation of collateralized financing entities. The
update applies to reporting entities that consolidate a collateralized financing entity and measures all financial assets and
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