Sun Life 2010 Annual Report Download - page 132

26.A.v Effect of differences between Cdn. GAAP and U.S. GAAP net income (loss):
For the differences between Cdn. GAAP and U.S. GAAP net income (loss) listed below, please refer to the following section for a
description of the differences in accounting policies.
For the years ended December 31 2010 2009 2008
Total net income (loss) in accordance with Cdn. GAAP $ 1,685 $ 622 $ 857
Adjustments related to:
Investments
Bonds(1) (1,321) (1,893) 1,632
Stocks and segregated fund units(1) (267) (716) 980
Derivative instruments 71 1,005 (136)
Real estate (55) (121) (214)
Total investments (1,572) (1,725) 2,262
Deferred acquisition costs
Deferred acquisition costs – deferred 765 925 793
Deferred acquisition costs – amortization and interest (991) (1,229) 444
Total deferred acquisition costs (226) (304) 1,237
Actuarial liabilities and other policyholder revenues and expenses
Premium and fees revenue (3,733) (5,610) (3,766)
Payments to policyholders, beneficiaries and depositors 4,075 3,757 4,467
Actuarial liabilities 1,217 6,593 (6,514)
Total actuarial liabilities and other policyholder revenues and expenses 1,559 4,740 (5,813)
Other (256) (26) 33
Income tax effect of above adjustments 294 (904) 745
Non-controlling interests’ net income (loss) 23 15 23
Total net income (loss) in accordance with U.S. GAAP $ 1,507 $ 2,418 $ (656)
(1) Differences in net income (loss) are attributable to different asset designations. Under Cdn. GAAP, assets are generally designated as held-for-trading for investments
supporting actuarial liabilities, and available- for-sale for assets generally not supporting actuarial liabilities (as described in more detail in Note 1). For U.S. GAAP, most of our
assets are designated as available-for-sale.
26.B Significant accounting policy differences between Cdn. GAAP and U.S. GAAP
The following table shows the significant accounting policy differences between Cdn. GAAP and U.S. GAAP applicable to us:
Cdn. GAAP U.S. GAAP
Bonds and Stocks When there is objective evidence that debt
securities are impaired due to issuer credit concern
resulting in a decline in fair value that is considered
other-than-temporary, including when there is intent
to sell, the loss is charged to earnings.
When there is objective evidence that equity
securities are impaired due to a significant or
prolonged decline in fair value that is considered
other-than-temporary, including when there is intent
to sell, the loss is charged to earnings.
Effective in 2009, if the fair value of a debt security
increases after an impairment loss was recognized
and the increase can be objectively related to an
event occurring after the impairment loss was
recognized, the impairment loss is reversed into
income. Prior to 2009, once an impairment loss was
recorded to income, it could not be reversed.
Commencing April 1, 2009, as a result of adoption
of Financial Accounting Standards Board (“FASB”)
ASC Topic 320, losses on debt securities which are
other-than-temporarily impaired are separated into
two categories, the portion of loss which is
considered credit loss (“credit loss”) and the portion
of loss which is due to other factors (“non-credit
loss”). The credit loss portion is charged to earnings,
while the non-credit loss is charged to other
comprehensive income (loss) if we do not intend to
sell the debt security, or if it is not more likely than
not that we will be required to sell the debt security.
Prior to April 2009, in addition to other-than-
temporary impairment due to issuer credit, other-
than-temporary impairment charges were also
recorded in income for declines in fair values of debt
securities due to changes in prevailing interest rates
when we did not have the intent and ability to hold to
recovery.
Impairment losses on debt securities are not
reversed.
128 Sun Life Financial Inc. Annual Report 2010 Notes to the Consolidated Financial Statements