BLK » Topics » Consolidated Sponsored Investment Funds

This excerpt taken from the BLK 8-K filed Sep 17, 2009.

Consolidated Sponsored Investment Funds

From time to time, the Company will maintain a controlling interest in a sponsored investment fund. All of the investments held by consolidated sponsored investment funds are carried at fair value, with corresponding changes in the investments’ fair values reflected in non-operating income in the Company’s consolidated statements of income. In the absence of a publicly available market value, fair value for such investments are estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of private investment fund investments, the fund’s net asset value. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for under another accounting method. In addition, changes in fair value of certain illiquid investments held by these funds, including direct investments in equity or debt securities of privately held companies and certain real estate products, are recorded based upon the most current information available at the time, which may precede the date of the statement of financial position, considering any significant changes in the operations of the investment.

Upon consolidation of various sponsored investment funds, on the Company’s consolidated statements of financial condition, the Company retains the specialized accounting of these funds pursuant to EITF No. 85-12, Retention of Specialized Accounting for Investments in Consolidation.

These excerpts taken from the BLK 10-K filed Mar 2, 2009.

Consolidated Sponsored Investment Funds

From time to time, the Company will maintain a controlling interest in a sponsored investment fund. All of the investments held by consolidated sponsored investment funds are carried at fair value, with corresponding changes in the investments’ fair values reflected in non-operating income in the Company’s consolidated statements of income. In the absence of a publicly available market value, fair value for such investments are estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of private investment fund investments, the fund’s net asset value. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for under another accounting method. In addition, changes in fair value of certain illiquid investments held by these funds, including direct investments in equity or debt securities of privately held companies and certain real estate products, are recorded based upon the most current information available at the time, which may precede the date of the statement of financial position, considering any significant changes in the operations of the investment.

Upon consolidation of various sponsored investment funds, on the Company’s consolidated statements of financial condition, the Company retains the specialized accounting of these funds pursuant to EITF No. 85-12, Retention of Specialized Accounting for Investments in Consolidation.

Consolidated Sponsored Investment Funds

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">From time to time, the Company will maintain a controlling interest in a sponsored investment fund. All of the investments held by consolidated sponsored
investment funds are carried at fair value, with corresponding changes in the investments’ fair values reflected in non-operating income in the Company’s consolidated statements of income. In the absence of a publicly available market
value, fair value for such investments are estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of
private investment fund investments, the fund’s net asset value. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for under another accounting
method. In addition, changes in fair value of certain illiquid investments held by these funds, including direct investments in equity or debt securities of privately held companies and certain real estate products, are recorded based upon the most
current information available at the time, which may precede the date of the statement of financial position, considering any significant changes in the operations of the investment.

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">Upon consolidation of various sponsored investment funds, on the Company’s consolidated statements of financial condition, the Company retains the
specialized accounting of these funds pursuant to EITF No. 85-12, Retention of Specialized Accounting for Investments in Consolidation.

SIZE="2">Investments in Debt and Marketable Equity Securities

BlackRock holds debt and marketable equity investments which, pursuant
to Statement of Financial Accounting Standards (“SFAS”) No. 115, Accounting for Certain Investments in Debt and Equity Securities, are classified as trading, available-for-sale, or held-to-maturity based on the Company’s
intent to sell the security or, for a debt security, the Company’s intent and ability to hold the debt security to maturity.

Trading
securities are those investments which are purchased principally for the purpose of selling them in the near term. Trading securities are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded
in non-operating income in the consolidated statements of income during the period of the change. Available-for-sale securities are those securities which are not classified as trading securities or held-to-maturity. Available-for-sale securities
are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in the accumulated other comprehensive income component of stockholders’ equity in the period of the change. Upon the
disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other comprehensive income to non-operating income on the Company’s consolidated statements of income. Held-to-maturity
debt securities are recorded at amortized cost in the consolidated statements of financial condition. At December 31, 2008 and 2007, BlackRock did not own any held-to-maturity investments.

STYLE="margin-top:0px;margin-bottom:0px"> 


F-12








BlackRock, Inc.

FACE="Times New Roman" SIZE="2">Notes to the Consolidated Financial Statements

(Dollar amounts in millions, except per share data
or as otherwise noted)

 







2.Significant Accounting Policies (continued)

 



Investments (continued)

SIZE="1"> 


These excerpts taken from the BLK 10-K filed Feb 28, 2008.

Consolidated Sponsored Investment Funds

From time to time, the Company will maintain a controlling interest in a sponsored investment fund. All of the investments held by consolidated sponsored investment funds are carried at fair value, with corresponding changes in the investments’ fair values reflected in non-operating income in the Company’s consolidated statements of income. In the absence of a publicly available market value, fair value for such investments are estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of private investment fund investments, the fund’s net asset value. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for under another accounting method. In addition, changes in fair value of certain illiquid investments held by these funds, including direct investments in equity or debt securities of privately held companies and certain real estate products, are recorded based upon the most current information available at the time, which may precede the date of the statement of financial position, considering any significant changes in the operations of the investment.

Consolidated Sponsored Investment Funds

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">From time to time, the Company will maintain a controlling interest in a sponsored investment fund. All of the investments held by consolidated sponsored
investment funds are carried at fair value, with corresponding changes in the investments’ fair values reflected in non-operating income in the Company’s consolidated statements of income. In the absence of a publicly available market
value, fair value for such investments are estimated in good faith by the Company’s management based on such factors as the liquidity, financial condition and current and projected operating performance of the investment and, in the case of
private investment fund investments, the fund’s net asset value. When the Company no longer controls these funds due to reduced ownership percentage or other reasons, the funds are deconsolidated and accounted for under another accounting
method. In addition, changes in fair value of certain illiquid investments held by these funds, including direct investments in equity or debt securities of privately held companies and certain real estate products, are recorded based upon the most
current information available at the time, which may precede the date of the statement of financial position, considering any significant changes in the operations of the investment.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Investments in Debt and Marketable Equity Securities

FACE="Times New Roman" SIZE="2">BlackRock holds debt and marketable equity investments which, pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 115, Accounting for Certain Investments in Debt and Equity
Securities,
are classified as trading, available-for-sale, or held-to-maturity based on the Company’s intent to sell the security or for a debt security the Company’s intent and ability to hold the debt security to maturity.

Trading securities are those investments which are purchased principally for the purpose of selling them in the near term. Trading
securities are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in non-operating income in the consolidated statements of income during the period of the change. Available-for-sale
securities are those securities which are not classified as trading securities or held-to-maturity. Available-for-sale securities are carried at fair value on the consolidated statements of financial condition with changes in fair value recorded in
the accumulated other comprehensive income component of stockholders’ equity in the period of the change. Upon the disposition of an available-for-sale security, the Company reclassifies the gain or loss on the security from accumulated other
comprehensive income to non-operating income on the Company’s consolidated statements of income. Held-to-maturity debt securities are recorded at amortized cost in the consolidated statements of financial condition. At December 31, 2007
and 2006, BlackRock did not own any held-to-maturity investments.

 


F-12








BlackRock, Inc.

FACE="Times New Roman" SIZE="2">Notes to the Consolidated Financial Statements

(Dollar amounts in thousands, except per share data
or as otherwise noted)

 







2.Significant Accounting Policies (continued)

 



Investments (continued)

SIZE="1"> 


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