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UNUM 2012 ANNUAL REPORT 103
Accounting Updates Adopted in 2011:
ASC 310 “Receivables.” In April 2011, the FASB issued an update to provide additional clarification to help creditors in determining
whether a creditor has granted a concession as well as whether a debtor is experiencing financial difficulties for purposes of determining
whether a restructuring constitutes a troubled debt restructuring. We adopted this update effective July 1, 2011. The adoption of this update
expanded our disclosures but had no effect on our financial position or results of operations.
Accounting Updates Adopted in 2010:
ASC 310 “Receivables.” In July 2010, the FASB issued an update to require additional disclosures regarding the credit quality of
financing receivables, including the entity’s credit risk exposure, its assessment of risk in estimating its allowance for credit losses, changes
in the allowance for credit losses and the reason for those changes, and troubled debt restructuring. We adopted all of the required
disclosures effective December 31, 2010 except for troubled debt restructuring disclosures which were deferred by the FASB. The adoption
of this update expanded our disclosures but had no effect on our financial position or results of operation.
ASC 810 “Consolidation.” In June 2009, the FASB issued an update to require a qualitative rather than a quantitative analysis to
determine the primary beneficiary of a variable interest entity and require enhanced disclosures about an enterprise’s involvement with a
variable interest entity. We adopted this update effective January 1, 2010. The adoption of this update had no effect on our financial position
or results of operations.
ASC 820 “Fair Value Measurements and Disclosures.” In January 2010, the FASB issued an update to require a number of additional
disclosures regarding fair value measurements. Specifically, the update requires a reporting entity to disclose the amounts of significant
transfers between Level 1 and Level 2 of the three tier fair value hierarchy and the reasons for these transfers, as well as the reasons for
any transfers in or out of Level 3, effective for annual and interim periods beginning after December 15, 2009. The update also requires
information in the reconciliation of recurring Level 3 measurements about purchases, sales, issuances, and settlements on a gross basis,
effective for annual and interim periods beginning after December 15, 2010. We adopted this update in its entirety, including early adoption
of the additional Level 3 information, effective January 1, 2010. The adoption of this update expanded our disclosures but had no effect on
our financial position or results of operations.
ASC 860 “Transfers and Servicing.” In June 2009, the FASB issued an update to eliminate the exceptions for qualifying special-purpose
entities from the consolidation guidance and eliminate the exception that permitted sale accounting for certain mortgage securitizations
when a transferor has not surrendered control over the transferred financial assets. In addition, this update clarifies certain requirements for
financial assets that are eligible for sale accounting and requires enhanced disclosures about the risks that a transferor continues to be
exposed to because of its continuing involvement in transferred financial assets. We adopted this update effective January 1, 2010. The
adoption of this update had no effect on our financial position or results of operations.
Accounting Updates Outstanding:
ASC 210 “Balance Sheet — Disclosures about Offsetting Assets and Liabilities.” In December 2011, the FASB issued an update to require
additional disclosures and information about financial instruments and derivative instruments that are either offset on the balance sheet or
are subject to an enforceable master netting arrangement. These disclosures are intended to provide information that will enable users of
financial statements to evaluate the effect or potential effect of netting arrangements on an entity’s financial position, including the effect
or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. In January 2013, the FASB
issued an update to clarify the scope of transactions that are subject to the disclosures about offsetting. Specifically, the update applies only
to derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending transactions to
the extent they are subject to a master netting arrangement or similar agreement. The amendments in these updates are effective for
interim and annual periods beginning on or after January 1, 2013. The adoption of these updates will expand our disclosures but will have
no effect on our financial position or results of operations.