Basis of Presentation

12 Months Ended

Dec. 31, 2012

Basis of Presentation

Basis of Presentation

1. Basis of Presentation

Ameriprise Financial, Inc. is a holding company, which primarily conducts business through its subsidiaries to provide financial planning, products and services that are designed to be utilized as solutions for clients' cash and liquidity, asset accumulation, income, protection and estate and wealth transfer needs. The foreign operations of Ameriprise Financial, Inc. are conducted primarily through its subsidiary, Threadneedle Asset Management Holdings Sàrl ("Threadneedle").

The accompanying Consolidated Financial Statements include the accounts of Ameriprise Financial, Inc., companies in which it directly or indirectly has a controlling financial interest and variable interest entities ("VIEs") in which it is the primary beneficiary (collectively, the "Company"). The income or loss generated by consolidated entities which will not be realized by the Company's shareholders is attributed to noncontrolling interests in the Consolidated Statements of Operations. Noncontrolling interests are the ownership interests in subsidiaries not attributable, directly or indirectly, to Ameriprise Financial, Inc. and are classified as equity within the Consolidated Balance Sheets. The Company, excluding noncontrolling interests, is defined as "Ameriprise Financial." All intercompany transactions and balances have been eliminated in consolidation. See Note 4 for additional information related to VIEs.

The results of Securities America Financial Corporation and its subsidiaries (collectively, "Securities America") have been presented as discontinued operations for all periods presented. The Company completed the sale of Securities America in the fourth quarter of 2011. See Note 24 for additional information on discontinued operations.

The accompanying Consolidated Financial Statements are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Certain reclassifications of prior period amounts have been made to conform to the current presentation.

In the fourth quarter of 2012, the Company made an adjustment to the model which values the reserves related to living benefit guarantees primarily attributable to prior periods, which resulted in a $41 million pretax benefit, net of deferred acquisition costs ("DAC") and deferred sales inducement costs ("DSIC") amortization of $11 million. In the fourth quarter of 2012, the Company completed a review of its deferred tax balances. This review resulted in adjustments to the Company's deferred tax balances. In addition, as part of the review, the Company discovered tax return errors for prior years which will be corrected. The net impact of the review resulted in a decrease of income tax expense of $16 million. In the second quarter of 2012, the Company made a correction for a tax item related to securities lending activities primarily attributable to prior periods, which resulted in a $32 million increase to tax expense. Management has determined that the effect of these corrections is not material to all current and previously issued financial statements.

The Company evaluated events or transactions that may have occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued.

On January 1, 2012, the Company retrospectively adopted the new accounting standard for DAC for insurance and annuity products. See Note 2 and Note 3 for further information on the new accounting standard and the resulting changes in the Company's accounting policies on the deferral of acquisition costs. The following tables present the effect of the change on affected financial statement line items for prior periods retrospectively adjusted:

	Year Ended December 31, 2011
	Previously Reported			Effect of Change			As Adjusted
	(in millions)
Revenues
Total net revenues	$	10,192		$	—		$	10,192
Expenses
Distribution expenses		2,497			62			2,559
Interest credited to fixed accounts		853			3			856
Benefits, claims, losses and settlement expenses		1,557			—			1,557
Amortization of deferred acquisition costs		618			(221	)		397
Interest and debt expense		317			—			317
General and administrative expense		2,965			94			3,059
Total expenses		8,807			(62	)		8,745
Income from continuing operations before income tax provision		1,385			62			1,447
Income tax provision		355			22			377
Income from continuing operations		1,030			40			1,070
Loss from discontinued operations, net of tax		(60	)		—			(60	)
Net income		970			40			1,010
Less: Net loss attributable to noncontrolling interests		(106	)		—			(106	)
Net income attributable to Ameriprise Financial	$	1,076		$	40		$	1,116
Earnings per share attributable to Ameriprise Financial, Inc. common shareholders
Basic
Income from continuing operations	$	4.71		$	0.16		$	4.87
Loss from discontinued operations		(0.25	)		—			(0.25	)
Net income	$	4.46		$	0.16		$	4.62
Diluted
Income from continuing operations	$	4.61		$	0.16		$	4.77
Loss from discontinued operations		(0.24	)		—			(0.24	)
Net income	$	4.37		$	0.16		$	4.53

	Year Ended December 31, 2010
	Previously Reported			Effect of Change			As Adjusted
	(in millions)
Revenues
Total net revenues	$	9,512		$	—		$	9,512
Expenses
Distribution expenses		2,065			70			2,135
Interest credited to fixed accounts		909			—			909
Benefits, claims, losses and settlement expenses		1,750			—			1,750
Amortization of deferred acquisition costs		127			(13	)		114
Interest and debt expense		290			—			290
General and administrative expense		2,737			108			2,845
Total expenses		7,878			165			8,043
Income from continuing operations before income tax provision		1,634			(165	)		1,469
Income tax provision		350			(57	)		293
Income from continuing operations		1,284			(108	)		1,176
Loss from discontinued operations, net of tax		(24	)		—			(24	)
Net income		1,260			(108	)		1,152
Less: Net income attributable to noncontrolling interests		163			—			163
Net income attributable to Ameriprise Financial	$	1,097		$	(108	)	$	989
Earnings per share attributable to Ameriprise Financial, Inc. common shareholders
Basic
Income from continuing operations	$	4.36		$	(0.42	)	$	3.94
Loss from discontinued operations		(0.10	)		—			(0.10	)
Net income	$	4.26		$	(0.42	)	$	3.84
Diluted
Income from continuing operations	$	4.27		$	(0.41	)	$	3.86
Loss from discontinued operations		(0.09	)		—			(0.09	)
Net income	$	4.18		$	(0.41	)	$	3.77

	December 31, 2011
	Previously Reported		Effect of Change			As Adjusted
	(in millions)
Assets
Deferred acquisition costs	$	4,402	$	(1,962	)	$	2,440
Other assets		7,468		283			7,751
Total assets		133,986		(1,679	)		132,307
Liabilities and Equity
Liabilities:
Future policy benefits and claims		31,723		(13	)		31,710
Other liabilities		5,432		(399	)		5,033
Total liabilities		123,025		(412	)		122,613
Equity:
Retained earnings		6,983		(1,380	)		5,603
Accumulated other comprehensive income, net of tax		638		113			751
Total equity		10,961		(1,267	)		9,694
Total liabilities and equity		133,986		(1,679	)		132,307

	December 31, 2010
	Previously Reported		Effect of Change			As Adjusted
	(in millions)
Retained earnings	$	6,190	$	(1,420	)	$	4,770
Accumulated other comprehensive income, net of tax		565		85			650
Total equity		11,285		(1,335	)		9,950

	January 1, 2010
	Previously Reported		Effect of Change			As Adjusted
	(in millions)
Retained earnings	$	5,276	$	(1,312	)	$	3,964
Accumulated other comprehensive income, net of tax		265		40			305
Total equity		9,872		(1,272	)		8,600