Present value of annuity formula
Certain of our operations have been presented as discontinued.
(gecs whose operations are presented on a one-line basis.
Under SOP 81-1, we estimate total contract revenue net of price concessions as well as total contract costs.
Investment securities We report investments in debt and marketable equity securities, and equity securities in our insurance portfolio, at fair value based on"d market prices or, if"d prices are not available, discounted expected cash flows using market rates commensurate with the credit quality.
We record gains or losses on sales of interests in commercial and military engine and turbo-machinery equipment programs.In contrast, sales of goods in the Infrastructure and Healthcare segments sometimes include multiple components.We recognize revenues for charges and assessments on these contracts, mostly for mortality, contract initiation, administration and surrender.We record syndication fees in earned income at the time related services are performed, unless significant contingencies exist.We collectively evaluate each portfolio for impairment.Impaired financing receivables are written down to the extent that we judge principal to be uncollectible.Results of associated companies are presented on a one-line basis.Liabilities for unpaid claims and claims adjustment expenses represent our best estimate of the ultimate obligations for reported and incurred-but-not-reported claims and the related estimated claim settlement expenses.Premiums received on investment contracts (including annuities without significant mortality risk) and universal life contracts are not reported as revenues but rather as deposit liabilities.It is possible to experience credit losses that are different from our current estimates.Accounting changes On January 1, 2007, we adopted fasb Interpretation (FIN) 48, Accounting for Uncertainty in Income Taxes, and fasb Staff Position (FSP) FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated.Assets are depreciated on a straight-line basis.
Guarantees of residual values by unrelated third parties are considered part of minimum lease payments.
Partial sales of business interests We record gains or losses on sales of their own shares by affiliates except when realization of gains is not reasonably assured, in which case we record the results in shareowners equity.
Our method of calculating estimated losses depends on the size, type and risk characteristics of the related receivables.
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We resume accruing interest on nonearning, non-restructured commercial loans only when (a) payments are brought current according to the loans original terms and (b) future payments are reasonably assured.Sfas 155 changed the basis on which we recognize earnings on these retained interests from level yield to fair value.Unrealized gains and losses on available-for-sale investment securities are included in shareowners equity, net of applicable taxes and other adjustments.We routinely update our estimates of future costs for agreements in process and report any cumulative effects of such adjustments in current operations.We measure SOP 81-1 revenues by applying our contract-specific estimated margin rates to incurred costs.Cost for a significant portion of.S.