Allstate (ALL)

FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards ("FSP FAS 123(R)-3")

        FSP FAS 123(R)-3 provided companies an option to elect an alternative calculation method for determining the pool of excess tax benefits available to absorb tax deficiencies recognized subsequent to the adoption of SFAS No. 123(R). SFAS No. 123(R) requires companies to calculate the pool of excess tax benefits as the net excess tax benefits that would have qualified had the company adopted SFAS No. 123 for recognition purposes when first effective in 1995. FSP FAS 123(R)-3 provided an alternative calculation based on actual increases to additional paid-in capital related to tax benefits from share-based compensation subsequent to the effective date of SFAS No. 123, less the tax on the cumulative incremental compensation costs the company included in its pro forma net income disclosures as if the company had applied the fair-value method to all awards, less the share-based compensation costs included in net income as reported. In conjunction with its adoption of SFAS No. 123(R) on January 1, 2006, the Company elected the alternative transition method described in FSP FAS 123(R)-3. The effect of the transition calculation did not have a material effect on the results of operations or financial position of the Company.

FASB Staff Position No. FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards ("FSP
FAS 123(R)-3")

        FSP FAS 123(R)-3 provided companies an option to elect an alternative calculation method for determining the pool of
excess tax benefits available to absorb tax deficiencies recognized subsequent to the adoption of SFAS No. 123(R). SFAS No. 123(R) requires companies to calculate the pool of excess tax
benefits as the net excess tax benefits that would have qualified had the company adopted SFAS No. 123 for recognition purposes when first effective in 1995. FSP FAS 123(R)-3
provided an alternative calculation based on actual increases to additional paid-in capital related to tax benefits from share-based compensation subsequent to the effective date of SFAS
No. 123, less the tax on the cumulative incremental compensation costs the company included in its pro forma net income disclosures as if the company had applied the fair-value
method to all awards, less the share-based compensation costs included in net income as reported. In conjunction with its adoption of SFAS No. 123(R) on January 1, 2006, the Company
elected the alternative transition method described in FSP FAS 123(R)-3. The effect of the transition calculation did not have a material effect on the results of operations or
financial position of the Company.