Assurant 2010 Annual Report Download - page 44

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38 ASSURANT, INC.2010 Form 10K
PART II
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
On January 1, 2008, the Company adopted the fair value measurements
and disclosures guidance.  is guidance defi ned fair value, addressed
how companies should measure fair value when they are required to
use a fair value measure for recognition or disclosure purposes under
GAAP and expanded disclosures about fair value measurements.  is
guidance was applied prospectively for fi nancial assets and liabilities
measured on a recurring basis as of January 1, 2008 except for certain
fi nancial assets that were measured at fair value using a transaction
price. For these fi nancial instruments, which the Company has, this
guidance required limited retrospective adoption and thus the diff erence
between the fair values using a transaction price and the fair values
using an exit price of the relevant fi nancial instruments was shown as a
cumulative-eff ect adjustment to the January 1, 2008 retained earnings
balance. At adoption, the Company recognized a $4,400 decrease to
other assets, and a corresponding decrease of $2,860 (after-tax) to
retained earnings. See Notes 5 and 6 for further information regarding
these fi nancial instruments and the fair value disclosures, respectively.
Recent Accounting Pronouncements—Not Yet
Adopted
In October 2010, the Financial Accounting Standards Board (“FASB”)
issued amendments to existing guidance on accounting for costs associated
with acquiring or renewing insurance contracts.  e amendments
modify the defi nition of the types of costs incurred by insurance
entities that can be capitalized in the acquisition of new and renewal
contracts. Under this amended guidance, acquisition costs are defi ned
as costs that are related directly to the successful acquisition of new
or renewal insurance contracts.  e amendments are eff ective for
fi scal years, and interim periods within those fi scal years, beginning
after December 15, 2011.  erefore, the Company is required to adopt
this guidance on January 1, 2012. Prospective application as of the date
of adoption is required; however retrospective application to all prior
periods presented upon the date of adoption is also permitted, but not
required. Early adoption is permitted, but only at the beginning of an
entity’s annual reporting period.  e Company is currently evaluating
the requirements of the amendments and the potential impact, if any,
on the Company’s fi nancial position and results of operations.
In September 2009, the FASB issued new guidance on multiple
deliverable revenue arrangements.  is new guidance requires entities
to use their best estimate of the selling price of a deliverable within
a multiple deliverable revenue arrangement if the entity and other
entities do not sell the deliverable separate from the other deliverables
within the arrangement. In addition it requires both qualitative and
quantitative disclosures.  is new guidance is eff ective for new or
materially modifi ed arrangements in fi scal years beginning on or after
June 15, 2010. Earlier application is permitted as of the beginning of
a fi scal year.  e Company did not apply the guidance early, thus it is
required to adopt this new guidance on January 1, 2011.  e adoption
of this new guidance will not have an impact on the Company’s fi nancial
position or results of operations.