KeyBank 2015 Annual Report Download - page 147

residential real estate collateralized consumer mortgage loans by derecognizing the loan and recognizing the
collateral asset. This accounting guidance was effective for reporting periods beginning after December 15, 2014
(effective January 1, 2015, for us) and could be implemented using either a modified retrospective method or
prospective method. Early adoption was permitted. We elected to implement the new accounting guidance using
a prospective approach. The adoption of this accounting guidance did not have a material effect on our financial
condition or results of operations. We provide the disclosure related to consumer residential mortgages required
by this new accounting guidance in Note 5 (“Asset Quality”).
Accounting Guidance Pending Adoption at December 31, 2015
Financial instruments. In January 2016, the FASB issued new accounting guidance that requires equity
investments, except those accounted for under the equity method of accounting or consolidated, to be measured
at fair value with changes recognized in net income. If there is no readily determinable fair value, the guidance
allows entities the ability to measure investments at cost less impairment, whereby impairment is based on a
qualitative assessment. The guidance eliminates the requirement to disclose the methods and significant
assumptions used to estimate the fair value of financial instruments measured at amortized cost and changes the
presentation of financial assets and financial liabilities on the balance sheet or in the footnotes. If an entity has
elected the fair value option to measure liabilities, the new accounting guidance requires the portion of the
change in the fair value of a liability resulting from credit risk to be presented in OCI. We have not elected to
measure any of our liabilities at fair value. This accounting and disclosure guidance will be effective for interim
and annual reporting periods beginning after December 15, 2017 (effective January 1, 2018, for us). For the
guidance applicable to us, the accounting will be implemented on a prospective basis, whereby early adoption is
not permitted. We are currently evaluating the impact that this accounting guidance may have on our financial
condition or results of operations.
Business combinations. In September 2015, the FASB issued new accounting guidance that obligates an
acquirer in a business combination to recognize adjustments to provisional amounts in the reporting period that
the amounts were determined, eliminating the requirement for retrospective adjustments. The acquirer should
record in the current period any income effects that resulted from the change in provisional amounts, calculated
as if the accounting were completed at the acquisition date. This accounting guidance will be effective for interim
and annual reporting periods beginning after December 15, 2015 (effective January 1, 2016, for us) and should
be implemented using the prospective method. Early adoption is permitted. The adoption of this accounting
guidance is not expected to have a material effect on our financial condition or results of operations.
Fair value measurement. In May 2015, the FASB issued new disclosure guidance that eliminates the
requirement to categorize investments measured using the net asset value practical expedient in the fair value
hierarchy table. Entities will be required to disclose the fair value of investments measured using the net asset
value practical expedient so that financial statement users can reconcile amounts reported in the fair value
hierarchy table to amounts reported on the balance sheet. This disclosure will be presented for interim and annual
reporting periods beginning after December 15, 2015 (March 31, 2016, for us) on a retrospective basis. Early
adoption is permitted. The adoption of this disclosure guidance will not affect our financial condition or results of
operations.
Cloud computing fees. In April 2015, the FASB issued new accounting guidance that clarifies a customer’s
accounting for fees paid in a cloud computing arrangement. If a cloud computing arrangement includes a
software license, then the customer should account for the software license element of the arrangement consistent
with the acquisition of other software licenses. If a cloud computing arrangement does not include a software
license, the customer should account for the arrangement as a service contract. This accounting guidance will be
effective for interim and annual reporting periods beginning after December 15, 2015 (effective January 1, 2016,
for us) and can be implemented using either a prospective method or a retrospective method. Early adoption is
permitted. We have elected to implement this new accounting guidance using a prospective approach. The
132