This excerpt taken from the STI 10-Q filed May 6, 2005.
Notes to Consolidated Financial Statements (Unaudited)
Effective January 1, 2002, the Company adopted the fair-value recognition provision of SFAS No. 123, prospectively, and began expensing the cost of stock options. The Company has quantified the effect on net income and earnings per share if the fair-value based method had been applied on a retrospective basis in Note 5 to the Consolidated Financial Statements.
In March 2005, the SEC released Staff Accounting Bulletin (SAB) No. 107, which addresses the application of SFAS No. 123(R). This SAB is intended to assist issuers with their initial implementation of SFAS No. 123(R) by providing interpretive guidance related to share-based compensation regarding the interaction between SFAS No. 123(R) and certain Securities and Exchange Commission rules and regulations. It does not change or amend the provisions of SFAS No. 123(R) or these SEC rules and regulations. SAB No. 107 also delayed the effective date of SFAS No. 123(R) for public companies to annual, rather than interim, periods beginning after June 15, 2005. The adoption of SFAS No. 123(R), as interpreted by SAB No. 107, is not expected to have a material impact on the Companys financial position or results of operations.
In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets an amendment of APB Opinion No. 29. SFAS No. 153 addresses the measurement of nonmonetary exchanges and eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets in APB No. 29, Accounting for Nonmonetary Transactions, and replaces it with an exception for exchanges that do not have commercial substance. This Statement specifies that a nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This Statement is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The Company does not expect the adoption of SFAS 153 to have a material impact on the Companys financial position or results of operations.
In March 2005, the EITF reached tentative conclusions on EITF Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights. This EITF applies to all limited partnerships and similar entities and states that the general partner, or group of general partners, is presumed to have control over the limited partnership regardless of the percentage of ownership. Additionally, this Issue states that a limited partners kick-out rights are considered substantive if they can be exercised by a simple majority of the limited partners voting interests and that rights that allow a partner to block an acquisition or disposition of assets, occurring in the normal course of business, are participating rights. These tentative conclusions have prompted the EITF to ask the FASB to make revisions to EITF Issue No. 96-16, Investors Accounting for an Investee When the Investor Has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights. The Company is currently in the process of evaluating the impact that EITF Issue No. 04-5 and the revisions to EITF Issue No. 96-16 would have on the Companys financial position or results of operations, if finalized.
In March 2005, the FASB affirmed a decision related to the application and clarification of SFAS No. 13, Accounting for Leases. FASB decided that a change in the timing of the realization of tax benefits on a leveraged lease will require recalculation of that lease. Additionally, the classification of a leveraged lease will be required to be reassessed if an important assumption related to the lease was revised and resulted in recalculation. These decisions are related to accounting issues that have arisen recently as companies reach settlements with the Internal Revenue Service (IRS) on certain types of leveraged lease transactions. The FASB expects to issue an Exposure Draft on these topics during the second quarter of 2005 with an effective date for fiscal years ending after December 15, 2005. SunTrust is currently in the process of evaluating the
Notes to Consolidated Financial Statements (Unaudited) continued
impact that this proposed guidance would have on the Companys financial position or results of operations, if finalized.