Unum 2013 Annual Report Download - page 103

UNUM 2013 ANNUAL REPORT / 101
Accounting Updates Adopted in 2013:
Accounting Standards Codification (ASC) 210 “Balance Sheet — Disclosures about Offsetting Assets and Liabilities.” In December 2011,
the Financial Accounting Standards Board (FASB) issued an update requiring 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 provide information about the effect or potential effect of netting arrangements on an entity’s financial position, including
the effect or potential effect of rights of set-off 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. We adopted these updates effective
January 1, 2013. The adoption of these updates expanded our disclosures but had no effect on our financial position or results of operations.
ASC 220 “Comprehensive Income.” In February 2013, the FASB issued an update to improve the transparency of reporting
reclassifications out of accumulated other comprehensive income by requiring additional information to be presented regarding certain
reclassification adjustments. We adopted this update effective January 1, 2013. The adoption of this update expanded our disclosures but
had no effect on our financial position or results of operations.
ASC 815 “Derivatives and Hedging.” In July 2013, the FASB issued an update which allows entities to use the Fed Funds Effective Swap
Rate, also referred to as the Overnight Index Swap Rate (OIS), as a benchmark interest rate for hedge accounting purposes. Previously the
only acceptable benchmark rates for hedge accounting purposes under GAAP were U.S. Treasury rates and the London Interbank Offered
Rate (LIBOR) swap rate. This update reflects the evolution of market hedging practices and is intended to provide more flexibility in hedging
interest rate risk. We adopted this update effective July 17, 2013 for qualifying new or redesignated hedging relationships entered into on or
after that date.
Accounting Updates Adopted in 2012:
ASC 220 “Comprehensive Income.” In June 2011, the FASB issued an update related to the financial statement presentation of
comprehensive income. This update requires that non-owner changes in stockholders’ equity be presented either in a single continuous
statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement
should present net income and its components, followed consecutively by a second statement presenting total other comprehensive
income, the components of other comprehensive income, and the total of comprehensive income. We adopted this update effective
January 1, 2012. The adoption of this update modified our financial statement presentation but had no effect on our financial position
or results of operations.
ASC 350 “Intangibles — Goodwill and Other.” In September 2011, the FASB issued an update which gives companies the option to first
assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. An entity is
not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more
likely than not that its fair value is less than its carrying amount. We adopted this update effective January 1, 2012. The adoption of this
update had no effect on our financial position or results of operations.
ASC 820 “Fair Value Measurements and Disclosures.” In May 2011, the FASB issued an update to require additional disclosures
regarding fair value measurements and to provide clarifying guidance on the application of existing fair value measurement requirements.
Specifically, the update requires additional information on Level 1 and Level 2 transfers within the fair value hierarchy; the categorization by
level of the fair value hierarchy for items that are not measured at fair value in the statement of financial position, but for which the fair
value of such items is required to be disclosed; and information about the sensitivity of a fair value measurement in Level 3 of the fair value
hierarchy to changes in unobservable inputs and any interrelationships between those unobservable inputs. We adopted this update effective
January 1, 2012. The adoption of this update expanded our disclosures but had no effect on our financial position or results of operations.