Navy Federal Credit Union 2015 Annual Report Download - page 71

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Navy Federal Credit Union52
During the holding period, updated BPOs are obtained periodically to reflect changes in fair
value. Navy Federal markets the REO properties for sale to the public and generally does not
hold properties for longer than one year.
The tables below present the items measured at fair value in the Consolidated Statements of
Financial Condition on a non-recurring basis where assets that are measured at the lower of cost
or fair value less costs to sell were recognized at fair value less costs to sell at December 31, 2015
and 2014:
Fair Value Measurements as of December 31, 2015
(dollars in thousands) Level 1 Level 2 Level 3 Total
Other Real Estate Owned $ — $ — $ 19,132 $ 19,132
Fair Value Measurements as of December 31, 2014
(dollars in thousands) Level 1 Level 2 Level 3 Total
Other Real Estate Owned $ — $ — $ 18,539 $ 18,539
The following table presents total non-recurring fair value measurements for the period, included
in earnings, attributable to the change in fair value relating to assets that are still held at
December 31, 2015 and 2014:
Total Gains (Losses)
(dollars in thousands) 2015 2014
Other Real Estate Owned $ 2,486 $ (526)
NOTE 22: FAIR VALUES OF FINANCIAL INSTRUMENTS
ASC 825-10, Fair Value of Financial Instruments—Disclosure, requires disclosure of estimated
fair values of financial instruments, including those financial instruments for which Navy Federal did
not elect fair value treatment. The financial instruments that are accounted for under ASC 820-10,
Fair Value Measurement, are disclosed separately in Note 21: Fair Value Measurement. Navy Federal
discloses fair value information for its financial instruments, whether recognized at fair value in the
Consolidated Statements of Financial Condition or not, and for which it is practical to estimate that
value. In cases where quoted market prices are not available, fair values are based on estimates
using present value or other valuation techniques. Those techniques are significantly aected by
the assumptions used, including the discount rate and estimates of future cash flows. In that regard,
the derived fair value cannot be substantiated by comparison to independent markets and, in many
cases, could not be realized in immediate settlement of the instrument. Certain financial instruments
and all non-financial instruments are excluded from these disclosure requirements. Accordingly,
the aggregate fair value amounts presented do not necessarily represent the underlying fair value
of Navy Federal. The following methods and assumptions were used in estimating the fair values
disclosed for financial instruments: