First Data 2013 Annual Report Download - page 70

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


The Company maintains investments in marketable and non-marketable securities, the majority of which are carried at fair value. These are included
in the “Settlement assets”, “Other current assets”, “Long-term settlement assets” and “Other long-term assets” line items of the Consolidated Balance Sheets.
The specific identification method is used to determine the cost basis of securities sold. As of December 31, 2013 and 2012, all of the debt and equity
securities were classified as available-for-sale. Unrealized gains and losses on these investments are included as a separate component of OCI, net of any
related tax effect. The Company assesses marketable securities for impairment quarterly. Cost method investments are evaluated for impairment upon an
indicator of impairment such as an event or change in circumstances that may have a significant adverse effect on the fair value of the investment. If no such
events or changes in circumstances have occurred, the fair value is estimated only if practicable to do so.
For equity securities, declines in value that are judged to be other than temporary in nature are recognized in the Consolidated Statements of Operations.
For public company equity securities, the Company’s policy is to treat a decline in the investment’s quoted market value that has lasted for more than six
months as an other than temporary decline in value.
For debt securities, when the Company intends to sell an impaired debt security or it is more likely than not it will be required to sell prior to recovery of
its amortized cost basis, an other-than-temporary-impairment (“OTTI”) has occurred. The impairment is recognized in earnings equal to the entire difference
between the debt security’s amortized cost basis and its fair value. When the Company does not intend to sell an impaired debt security and it is not more
likely than not it will be required to sell prior to recovery of its amortized cost basis, the Company assesses whether it will recover its amortized cost basis. If
the entire amortized cost will not be recovered, a credit loss exists resulting in the credit loss portion of the OTTI being recognized in earnings and the amount
related to all other factors recognized in OCI. Refer to Note 7 of these Consolidated Financial Statements for a detailed discussion regarding the fair value of the
Company’s investments.

In March 2013, the Financial Accounting Standards Board issued guidance that resolves diversity in practice as to when to release the cumulative
translation adjustment into net income when a parent ceases to have a controlling interest in a subsidiary within a foreign entity or sells a part or all of its
investment in a foreign entity. The guidance also resolves diversity in the accounting for the cumulative translation adjustment in a business combination
achieved in stages involving a foreign entity. The Company adopted the guidance as of January 1, 2013. Adoption did not have an impact on the Company’s
financial position or results of operations.
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