Sun Life 2010 Annual Report Download - page 138

The changes in credit losses on available-for-sale debt securities, recorded in OTTI and recognized in OCI is as follows:
Cumulative other-than-temporary impairment credit losses of available-for-sale debt securities:
Total
Credit losses of other-than-temporarily impaired debt securities upon the adoption of Topic 320 (FSP FAS115-2 and
124-2) at transition as at April 1, 2009 512
Credit losses recognized in income on debt securities not previously impaired 119
Credit losses recognized in income on debt securities that have previously been impaired 2
Reductions due to securities sold (253)
Balance, December 31, 2009 $ 380
Credit losses recognized in income on debt securities not previously impaired 60
Credit losses recognized in income on debt securities that have previously been impaired 4
Reductions due to securities sold (128)
Effect of changes in currency exchange rates (22)
Balance, December 31, 2010 $ 294
Stocks
All equity instruments in an unrealized loss position are reviewed quarterly to determine if objective evidence of impairment exists.
Objective evidence of impairment for an investment in an equity instrument includes, but is not limited to, the financial condition and
near-term prospects of the issuer, including information about significant changes with adverse effects that have taken place in the
technological, market, economic or legal environment in which the issuer operates that may indicate that the carrying amount will not
be recovered, and a significant or prolonged decline in the fair value of an equity instrument below its cost. If, as a result of this review,
the security is determined to be other-than-temporarily impaired, it is written down to its fair value.
In addition to the review process described above, we applied presumptive impairment tests to determine whether there has been a
significant or prolonged decline in the fair value of an equity instrument below its cost. Unless extenuating circumstances exist, all
equity instruments exhibiting the following characteristics are presumed to be other-than-temporarily impaired and are written down to
their fair value:
• Fair value less than cost for longer than 12 months;
• Fair value less than cost for longer than 6 months and fair value less than 60% of cost; or
• Fair value less than 50% of cost
In all circumstances, if we do not have the intent and ability to retain our investment in an equity instrument for a period of time
sufficient to allow for the anticipated recovery of our cost, the instrument is written down to fair value.
For the year ended December 31, 2010, impairment charges of $23 ($352 in 2009), were recognized related to available-for-sale
stocks.
26.D.vi Gross unrealized gains (losses) on available-for-sale bonds and stocks:
As at December 31, 2010
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)(1)
Estimated
Fair Value
Issued or guaranteed by:
Canadian federal government $ 3,356 $ 100 $ (8) $ 3,448
Canadian provincial and municipal governments 6,978 962 (68) 7,872
U.S. Treasury and other U.S. agencies 2,233 74 (26) 2,281
Other governments 3,390 448 (26) 3,812
Corporate 30,767 1,886 (511) 32,142
Asset-backed securities
Commercial mortgage-backed securities 1,013 65 (42) 1,036
Residential mortgage-backed securities 430 22 (1) 451
Collateralized debt obligations 58 1 (11) 48
Other 390 2 (1) 391
Total bonds $ 48,615 $ 3,560 $ (694) $ 51,481
(1) The gross unrealized losses include the before tax non-credit OTTI loss of $227, that is recorded as a component of accumulated OCI for assets still held at the reporting date.
134 Sun Life Financial Inc. Annual Report 2010 Notes to the Consolidated Financial Statements