Regions Bank 2008 Annual Report Download - page 118

application for all financial statements presented. Regions has elected not to present collateral posted/received
under master netting arrangements at fair value and thus, has not netted such amounts against derivative amounts
included in the consolidated balance sheets. Collateral posted/received is included in other interest-earning
assets/short-term borrowings on the consolidated balance sheets.
In November 2007, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 109,
“Application of Accounting Principles to Loan Commitments” (“SAB 109”), to inform registrants of the Staff’s
view that the fair value of written loan commitments that are accounted for at fair value should include expected
net future cash flows related to the associated servicing of the loan. Additionally, the Staff reaffirmed its previous
views that internally-developed intangible assets (such as customer relationship intangible assets) should not be
recorded as part of the fair value of such commitments. The Staff expects registrants to apply the views stated in
SAB 109 on a prospective basis to written loan commitments recorded at fair value which were issued or
modified in fiscal quarters beginning after December 15, 2007. Regions adopted SAB 109 on January 1, 2008.
The adoption of SAB 109 did not have a material impact on Regions’ consolidated financial statements.
In December 2008, the FASB issued FASB Staff Position No. FAS 140-4 and FIN 46(R)-8, “Disclosures
about Transfers of Financial Assets and Interests in Variable Interest Entities” (“FSP 140-4 and 46(R)-8”). This
FSP requires additional disclosures by public entities with continuing involvement in transfers of financial assets
to special purpose entities and with variable interests in VIEs, including sponsors that have a variable interest in a
VIE. Additionally, this FSP requires certain disclosures to be provided by a public entity that is (1) a sponsor of a
qualifying special-purpose entity (“SPE”) that holds a variable interest in the qualifying SPE but was not the
transferor (nontransferor) of financial assets to the qualifying SPE, and (2) a servicer of a qualifying SPE that
holds a significant variable interest in the qualifying SPE but was not the transferor (nontransferor) of financial
assets to the qualifying SPE. This FSP is effective for the first reporting period (interim or annual) that ends after
December 15, 2008. Regions adopted FSP 140-4 and 46(R)-8 as of December 31, 2008, and the applicable
disclosures are contained in Note 2, “Variable Interest Entities” to the consolidated financial statements.
In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payments Transactions Are Participating Securities” (“FSP EITF 03-6-1”). FSP EITF
03-6-1 requires that instruments granted in share-based payment transactions, that are considered to be
participating securities, should be included in the earnings allocation in computing earnings per share (“EPS”)
under the two-class method described in FASB Statement No. 128, “Earnings per Share”. FSP EITF 03-6-1 is
effective for fiscal years beginning after December 15, 2008 with all prior period EPS data being adjusted
retrospectively. Early adoption is not permitted. Regions adopted FSP EITF 03-6-1 as of December 31, 2008, and
the effect of adoption on the consolidated financial statements was not material.
In October 2008, the FASB issued FASB Staff Position No. FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active” (“FSP 157-3”). FSP 157-3 clarifies the
application of FAS 157 in a market that is not active. The FSP is intended to address the following application
issues: (a) how the reporting entity’s own assumptions (that is, expected cash flows and appropriately risk-
adjusted discount rates) should be considered when measuring fair value when relevant observable inputs do not
exist; (b) how available observable inputs in a market that is not active should be considered when measuring fair
value; and (c) how the use of market quotes (for example, broker quotes or pricing services for the same or
similar financial assets) should be considered when assessing the relevance of observable and unobservable
inputs available to measure fair value. FSP 157-3 is effective on issuance, including prior periods for which
financial statements have not been issued. Regions adopted FSP 157-3 for the quarter ended September 30, 2008
and the effect of adoption on the consolidated financial statements was not material.
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