This excerpt taken from the C 8-K filed Oct 13, 2009.
Trading account liabilities include securities sold, not yet purchased (short positions), and derivatives in a net payable position, as well as certain liabilities that Citigroup has elected to carry at fair value under SFAS 159 or SFAS 155, Accounting for Certain Hybrid Financial Instruments (SFAS 155) as set out in Note 27 to the Consolidated Financial Statements.
Other than physical commodities inventory, all trading account assets and liabilities are carried at fair value. Revenues generated from trading assets and trading liabilities are generally reported in Principal transactions and include realized gains and losses as well as unrealized gains and losses resulting from changes in the fair value of such instruments. Interest income on trading assets is recorded in Interest revenue reduced by interest expense on trading liabilities.
Physical commodities inventory is carried at the lower of cost or market (LOCOM) with related gains or losses reported in Principal transactions. Realized gains and losses on sales of commodities inventory are included in Principal transactions on a first in, first out basis.
Derivatives used for trading purposes include interest rate, currency, equity, credit, and commodity swap agreements, options, caps and floors, warrants, and financial and commodity futures and forward contracts. Derivative asset and liability positions are presented net by counterparty on the Consolidated Balance Sheet when a valid master netting agreement exists and the other conditions set out in FASB Interpretation No. 39, Offsetting of Amounts Related to Certain Contracts (FIN 39) are met.
The Company uses a number of techniques to determine the fair value of trading assets and liabilities, all of which are described in Note 26 to the Consolidated Financial Statements.
This excerpt taken from the C 10-K filed Feb 28, 2005.
Trading Account Liabilities
At December 31, 2004, trading account liabilities of $135.5 billion increased $13.6 billion from the prior year. The 11% increase includes a $7.7 billion increase in securities sold, not yet purchased, and a $5.9 billion increase in revaluation losses (primarily on foreign exchange derivative transactions). The increase in securities sold is attributable to an increase of $6.9 billion in debt securities and an increase of $0.8 billion in U.S. Treasury securities. See Note 8 to the Consolidated Financial Statements.