Recent And Future Accounting Pronouncements

9 Months Ended

Sep. 30, 2011

Recent And Future Accounting Pronouncements

Recent And Future Accounting Pronouncements

Note 2:Recent and Future Accounting Pronouncements

On July 21, 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. This ASU amends FASB Accounting Standards Codification (ASC) Topic 310, Receivables, to improve the disclosures that an entity provides about the credit quality of its financing receivables and the related allowance for credit losses. As a result of these amendments, an entity is required to disaggregate, by portfolio segment or class of financing receivable, certain existing disclosures and provide certain new disclosures about its financing receivables and related allowance for credit losses.

Existing disclosures are amended to require an entity to provide a rollforward schedule of the allowance for credit losses from the beginning of the reporting period to the end of the reporting period on a portfolio segment basis, with the ending balance further disaggregated on the basis of the impairment method. For each disaggregated ending balance in the rollforward schedule, the related recorded investment in financing receivables must be disclosed. The disclosure would include the nonaccrual status of financing receivables by class of financing receivables, as well as the impaired financing receivables by class of financing receivables.

The amendments in the ASU also require an entity to provide the following additional disclosures about its financing receivables: (1) the credit quality indicators of financing receivables at the end of the reporting period by class of financing receivables; (2) the aging of past due financing receivables at the end of the reporting period by class of financing receivables; (3) the nature and extent of troubled debt restructurings that occurred during the period by class of financing receivables and their effect on the allowance for credit losses; (4) the nature and extent of financing receivables modified as troubled debt restructurings within the previous 12 months that defaulted during the reporting period by class of financing receivables and their effect on the allowance for credit losses; and (5) significant purchases and sales of financing receivables during the reporting period disaggregated by portfolio segment.

For public entities, the disclosures as of the end of a reporting period were effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity that occurs during a reporting period were effective for interim and annual reporting periods beginning on or after December 15, 2010. Management has adopted this update and included the disclosures in the consolidated financial statements. The adoption of this update had no adverse impact on the Company's consolidated financial statements.

On January 19, 2011, the FASB issued ASU 2011-01, Receivables (Topic 310) Deferral of the Effective Date of Disclosures about Troubled Debt Restructurings in Update No. 2010-20. The amendments in this ASU temporarily delayed the effective date of the disclosures about troubled debt restructurings in ASU 2010-20 for public entities. The effective date of the new disclosures about troubled debt restructurings for public entities and the guidance for determining what constitutes a troubled debt restructuring is provided in ASU 2011-02 issued on April 5, 2011.

On April 5, 2011, the FASB issued ASU 2011-02, A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The update is intended to assist lenders and other creditors in determining whether a modification of terms meets the criteria to be considered a troubled debt restructuring. The update clarifies that if a borrower does not have access to debt at a market rate for debt with similar characteristics as the restructured debt, the restructuring would be considered at a below-market rate, which may indicate a concession was granted. In that circumstance, a creditor should consider all aspects of the restructuring in determining whether it has granted a concession. If a concession has been granted, the creditor must make a separate assessment about whether the debtor is experiencing financial difficulties to determine if the restructure constitutes a troubled debt restructuring. This update clarifies the guidance on a creditor's evaluation of whether a debtor is experiencing financial difficulties. The update also clarifies that a creditor is precluded from using the effective interest rate test in the debtor's guidance on restructuring of payables when evaluating whether a restructuring constitutes a troubled debt restructuring. The guidance was effective for public entities for the first interim or annual period beginning on or after June 15, 2011, and is to be applied retrospectively to modifications that occur on or after the beginning of the year of adoption. The update also required the disclosures about troubled debt restructurings previously deferred in ASU 2011-01 to be disclosed for the interim and annual periods beginning on or after June 15, 2011. Management has adopted this update and included the disclosures in the consolidated financial statements. The adoption of this update is further discussed in Note 5, Loans and Allowance for Loan Losses.

On June 16, 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220) Presentation of Comprehensive Income. This update is intended to increase the prominence of other comprehensive income in financial statements. The main provision of this update provides that an entity that reports items of other comprehensive income has the option to present comprehensive income in either one or two consecutive financial statements. In the single statement approach the entity must present the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income. In the two-statement approach, an entity must present the components of net income and total net income in the first statement. That statement must be immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The option in current GAAP that permits the presentation of other comprehensive income in the statement of changes in equity has been eliminated. The amendments for this update should be applied retrospectively.

For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Management does not anticipate that this update will have a material impact on the Company's consolidated financial statements.