Goldman Sachs 2012 Annual Report Download - page 150

Notes to Consolidated Financial Statements
Transfers Between Levels of the Fair Value Hierarchy
Transfers between levels of the fair value hierarchy are
reported at the beginning of the reporting period in which
they occur. There were no transfers of other financial assets
and financial liabilities between level 1 and level 2 during
the year ended December 2012. The tables below present
information about transfers between level 2 and level 3.
Level 3 Rollforward
If a financial asset or financial liability was transferred to
level 3 during a reporting year, its entire gain or loss for the
year is included in level 3.
The tables below present changes in fair value for other
financial assets and financial liabilities accounted for at fair
value categorized as level 3 as of the end of the year. Level 3
other financial assets and liabilities are frequently
economically hedged with cash instruments and derivatives.
Accordingly, gains or losses that are reported in level 3 can
be partially offset by gains or losses attributable to level 1, 2
or 3 cash instruments or derivatives. As a result, gains or
losses included in the level 3 rollforward below do not
necessarily represent the overall impact on the firm’s results
of operations, liquidity or capital resources.
Level 3 Other Financial Assets at Fair Value for the Year Ended December 2012
in millions
Balance,
beginning
of year
Net
realized
gains/
(losses)
Net unrealized
gains/(losses)
relating to
instruments
still held at
year-end Purchases Sales Issuances Settlements
Transfers
into
level 3
Transfers
out of
level 3
Balance,
end of
year
Securities purchased under
agreements to resell $ 557 $ 7 $ — $ 116 $— $ — $ (402) $ — $ — $ 278
Receivables from customers
and counterparties 795 — 37 199 — — (17) — (373) 641
Other assets — — 82 — — — (23) 448 — 507
Total $ 1,352 $ 7 1$ 119 1$ 315 $— $ — $ (442) $448 $ (373) $ 1,426
1. The aggregate amounts include gains/(losses) of approximately $119 million, $(3) million and $10 million reported in “Market making,” “Other principal transactions”
and “Interest income,” respectively.
Level 3 Other Financial Liabilities at Fair Value for the Year Ended December 2012
in millions
Balance,
beginning
of year
Net
realized
(gains)/
losses
Net unrealized
(gains)/losses
relating to
instruments
still held at
year-end Purchases Sales Issuances Settlements
Transfers
into
level 3
Transfers
out of
level 3
Balance,
end of
year
Deposits $ 13 $ — $ 5 $ — $— $ 326 $ (1) $ 16 $ — $ 359
Securities sold under
agreements to repurchase,
at fair value 2,181 — — — — — (254) — — 1,927
Other secured financings 1,752 12 (51) — — 854 (1,155) — — 1,412
Unsecured short-term
borrowings 3,294 (13) 204 (13) — 762 (1,206) 240 (684) 2,584
Unsecured long-term
borrowings 2,191 31 286 — — 329 (344) 225 (801) 1,917
Other liabilities and
accrued expenses 8,996 78 941 1,617 — — (360) 2 — 11,274
Total $18,427 $108 1$1,385 1$1,604 $— $2,271 $(3,320) $483 $(1,485) $19,473
1. The aggregate amounts include losses of approximately $1.37 billion, $113 million and $15 million reported in “Market making,” “Other principal transactions” and
“Interest expense,” respectively.
The net unrealized loss on level 3 other financial liabilities
of $1.39 billion for the year ended December 2012
primarily reflected the impact of tighter funding spreads
and changes in foreign exchange rates on certain insurance
liabilities, and an increase in global equity prices and tighter
credit spreads on certain hybrid financial instruments.
Transfers into level 3 of other financial assets during the
year ended December 2012 reflected transfers of level 3
assets classified as held for sale related to the firm’s
reinsurance business, which were previously included in
level 3 “Financial instruments owned, at fair value.”
148 Goldman Sachs 2012 Annual Report