eTrade 2009 Annual Report Download - page 115

Company excludes from the calculation of diluted loss per share stock options, unvested restricted stock awards
and units and shares related to convertible debentures that would have been anti-dilutive.
New Accounting and Disclosure Guidance—Below is the new accounting and disclosure guidance that
relates to activities in which the Company is engaged.
Disclosures about Derivative Instruments and Hedging Activities
In March 2008, the Financial Accounting Standards Board (“FASB”) amended the disclosure requirements
for derivative instruments and hedging activities. The amendments became effective on January 1, 2009 for the
Company. The Company’s disclosures about derivative instruments and hedging activities in Note 8—
Accounting for Derivative Instruments and Hedging Activities reflect the adoption of the amended disclosure
requirements.
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies
In April 2009, the FASB amended the accounting and disclosure guidance for business combinations to
address application issues raised by preparers, auditors, and members of the legal profession on initial
recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities
arising from contingencies in a business combination. The amended accounting and disclosure guidance is
effective for assets or liabilities arising from contingencies in business combinations for which the acquisition
date is on or after January 1, 2009 for the Company and did not impact its financial condition, results of
operations or cash flows.
Interim Disclosures about Fair Value of Financial Instruments
In April 2009, the FASB amended the disclosure guidance specific to the fair value of financial instruments
to require the fair value disclosures for interim reporting periods of publicly traded companies as well as in
annual financial statements. The Company’s disclosures about the fair value of financial instruments during
interim reporting periods reflected the adoption of the amended disclosure guidance beginning in the second
quarter of 2009.
Recognition and Presentation of Other-Than-Temporary Impairments
In April 2009, the FASB amended the OTTI accounting guidance for debt securities and the presentation
and disclosure requirements of OTTI on debt and equity securities in the financial statements. The amended
accounting guidance did not amend existing recognition and measurement guidance related to OTTI of equity
securities. The Company adopted the amended guidance on April 1, 2009. As a result of the adoption, the
Company recognized a $20.2 million after-tax decrease to beginning accumulated deficit and a corresponding
offset in accumulated other comprehensive loss on the consolidated balance sheet as of April 1, 2009. For
additional information regarding the adoption of this amended accounting and disclosure guidance, see Note 6—
Available-for-Sale Mortgage-Backed and Investment Securities.
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly
In April 2009, the FASB amended the fair value measurements accounting guidance to provide additional
guidance for estimating fair value when the volume and level of activity for the asset or liability have
significantly decreased. The amended accounting guidance also included guidance on identifying circumstances
that indicate a transaction is not orderly. The Company adopted this amended accounting guidance on April 1,
2009. The Company’s adoption of this guidance did not have a material impact on its financial condition, results
of operations or cash flows.
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