Bank of America 2006 Annual Report Download - page 140

On December 31, 2006, the Corporation adopted SFAS 158 which
requires the recognition of a plan’s over-funded or under-funded status as
an asset or liability with an offsetting adjustment to Accumulated OCI.
SFAS 158 requires the determination of the fair values of a plan’s assets
at a company’s year-end and recognition of actuarial gains and losses,
prior service costs or credits, and transition assets or obligations as a
component of Accumulated OCI. These amounts were previously netted
against the plans’ funded status in the Corporation’s Consolidated Bal-
ance Sheet pursuant to the provisions of SFAS 87. These amounts will be
subsequently recognized as components of net periodic benefit costs.
Further, actuarial gains and losses that arise in subsequent periods that
are not initially recognized as a component of net periodic benefit cost will
be recognized as a component of Accumulated OCI. Those amounts will
subsequently be recognized as a component of net periodic benefit cost
as they are amortized during future periods.
The incremental effects of adopting the provisions of SFAS 158 on
the Corporation’s Consolidated Balance Sheet at December 31, 2006 are
presented in the following table. The adoption of SFAS 158 had no effect
on the Corporation’s Consolidated Statement of Income for the year ended
December 31, 2006, or for any year presented.
(Dollars in millions)
Before
Application of
Statement 158 Adjustments
After
Application of
Statement 158
Other assets
(1)
$ 121,649 $(1,966) $ 119,683
Total assets 1,461,703 (1,966) 1,459,737
Accrued expenses and other liabilities
(2)
42,790 (658) 42,132
Total liabilities 1,325,123 (658) 1,324,465
Accumulated OCI
(3)
(6,403) (1,308) (7,711)
Total shareholders’ equity 136,580 (1,308) 135,272
Total liabilities and shareholders’ equity 1,461,703 (1,966) 1,459,737
(1) Represents adjustments to plans in an asset position of $(1,966) million.
(2) Represents adjustments to plans in a liability position of $301 million, the reversal of the additional minimum liability adjustment of $(190) million and an adjustment to deferred tax liabilities of $(769) million.
(3) Includes employee benefit plan adjustments of $(1,428) million, net of tax, and the reversal of the additional minimum liability adjustment of $120 million, net of tax.
Amounts included in Accumulated OCI (pre-tax) at December 31, 2006 were as follows:
(Dollars in millions)
Qualified
Pension Plans
Nonqualified
Pension Plans
Postretirement
Health and Life
Plans Total
Net actuarial loss
$1,765 $224 $ (68) $1,921
Transition obligation – – 189 189
Prior service cost 201 (44) – 157
Amount recognized in Accumulated OCI (1) $ 1,966 $180 $121 $ 2,267
(1) Amount recognized in Accumulated OCI net of tax is $1,428 million.
The estimated net actuarial loss and prior service cost for the Quali-
fied Pension Plans that will be amortized from Accumulated OCI, (pre-tax),
into net periodic benefit cost during 2007 are $130 million and $46 mil-
lion. The estimated net actuarial loss and prior service cost for the Non-
qualified Pension Plans that will be amortized from Accumulated OCI, (pre-
tax), into net periodic benefit cost during 2007 are $19 million and $(8)
million. The estimated net actuarial loss and transition obligation for the
Postretirement Health and Life Plans that will be amortized from Accumu-
lated OCI, (pre-tax), into net periodic benefit cost during 2007 is $(22)
million and $31 million.
138 Bank of America 2006