US Bank 2006 Annual Report Download - page 70

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Notes to Consolidated Financial Statements
Trust, U.S. Bancorp Investments and Insurance, FAF
SIGNIFICANT ACCOUNTING POLICIES
Advisors, Institutional Trust and Custody and
U.S. Bancorp and its subsidiaries (the ‘‘Company’’) is a Fund Services.
multi-state financial services holding company
Payment Services includes consumer and business credit
headquartered in Minneapolis, Minnesota. The Company
cards, stored-value cards, debit cards, corporate and
provides a full range of financial services including lending
purchasing card services, consumer lines of credit, ATM
and depository services through banking offices principally
processing and merchant processing.
in 24 states. The Company also engages in credit card,
merchant, and ATM processing, mortgage banking, Treasury and Corporate Support includes the Company’s
insurance, trust and investment management, brokerage, investment portfolios, funding, capital management and
and leasing activities principally in domestic markets. asset securitization activities, interest rate risk management,
the net effect of transfer pricing related to average balances
Basis of Presentation The consolidated financial statements
and the residual aggregate of those expenses associated with
include the accounts of the Company, its subsidiaries and
corporate activities that are managed on a consolidated
all variable interest entities for which the Company is the
basis.
primary beneficiary. The consolidation eliminates all
significant intercompany accounts and transactions. Certain Segment Results Accounting policies for the lines of
items in prior periods have been reclassified to conform to business are the same as those used in preparation of the
the current presentation. consolidated financial statements with respect to activities
specifically attributable to each business line. However, the
Uses of Estimates The preparation of financial statements in
preparation of business line results requires management to
conformity with generally accepted accounting principles
establish methodologies to allocate funding costs and
requires management to make estimates and assumptions
benefits, expenses and other financial elements to each line
that affect the amounts reported in the financial statements
of business. For details of these methodologies and segment
and accompanying notes. Actual experience could differ
results, see ‘‘Basis for Financial Presentation’’ and Table 23
from those estimates.
‘‘Line of Business Financial Performance’’ included in
Management’s Discussion and Analysis which is
BUSINESS SEGMENTS
incorporated by reference into these Notes to Consolidated
Within the Company, financial performance is measured by Financial Statements.
major lines of business based on the products and services
provided to customers through its distribution channels. SECURITIES
The Company has five reportable operating segments:
Realized gains or losses on securities are determined on a
Wholesale Banking offers lending, equipment finance and trade date basis based on the specific carrying value of the
small-ticket leasing, depository, treasury management, investments being sold.
capital markets, foreign exchange, international trade
Trading Securities Debt and equity securities held for resale
services and other financial services to middle market, large
are classified as trading securities and reported at fair value.
corporate, commercial real estate and public sector clients.
Realized gains or losses are reported in noninterest income.
Consumer Banking delivers products and services through
Available-for-sale Securities These securities are not
banking offices, telephone servicing and sales, on-line
trading securities but may be sold before maturity in
services, direct mail and ATMs. It encompasses community
response to changes in the Company’s interest rate risk
banking, metropolitan banking, in-store banking, small
profile, funding needs or demand for collateralized deposits
business banking, consumer lending, mortgage banking,
by public entities. Available-for-sale securities are carried at
consumer finance, workplace banking, student banking and
fair value with unrealized net gains or losses reported
24-hour banking.
within other comprehensive income in shareholders’ equity.
Wealth Management provides trust, private banking, When sold, the amortized cost of the specific securities is
financial advisory, investment management, retail brokerage used to compute the gain or loss. Declines in fair value that
services, insurance, custody and mutual fund servicing
through six businesses: Private Client Group, Corporate
68 U.S. BANCORP
Note 1