Consolidated Financial Statements for Holding Companies (AA HCs)

DRAFT
Schedule HI

gains (losses) on available-for-sale securities,"
respectively).
(5) Revaluation adjustments to the carrying value of all
assets and liabilities reported in Schedule HC at fair
value under a fair value option. Holding companies
should report these net decreases (increases) in fair
value on trading assets and liabilities in Schedule HI,
item 5(c); on servicing assets and liabilities in Schedule HI, item 5(f); and on other financial assets and
liabilities in Schedule HI, item 5(1). Contractual
amounts of interest income earned and interest
expense incurred on these financial assets and liabilities should be excluded from the net decreases
(increases) in fair value and reported in the appropriate interest income or interest expense items on
Schedule HI.

Line Item 7(e) Total noninterest expense.
Report the sum of items 7(a) through 7(d).

Line Item 8 Income (loss) before applicable
income taxes and discontinued operations.
Report the consolidated holding company's pretax operating income. This amount will generally be determined
by taking item 3, "Net interest income," minus item 4,
"Provision for loan and lease losses," plus item 5(m),
"Total noninterest income," plus or minus item 6(a),
"Realized gains (losses) on held-to-maturity securities,"
plus or minus item 6(b), "Realized gains (losses) on
available-for-sale securities," minus item 7(e), "Total
noninterest expense." If the result is negative, report with
a minus (-) sign.

Line Item 9 Applicable income taxes (on item 8).
Report the total estimated federal, state and local, and
foreign income tax expense applicable to item 8, "Income
(loss) before applicable income taxes and discontinued
operations." Include both the current and deferred portions of these income taxes. If the amount is a tax benefit
rather than tax expense, report with a minus(-) sign.
Include as applicable income taxes all taxes based on a
net amount of taxable revenues less deductible expenses.
Exclude from applicable income taxes all taxes based on
gross revenues or gross receipts (report such taxes in
item 7(d), " Other noninterest expense").

Include income tax effects of changes in tax laws or rates.
Also include the effect of changes in the valuation

Include the tax benefit of an operating loss carryforward or
carryback for which the source of
the income or loss in the current year is reported in
Schedule HI, item 8, "Income (loss) before
applicable income taxes and discontinued operations."

allowance relate to deferred tax assets resulting from a
change in est" ate of the realizability of deferred tax
assets, excl ·ng the effect of any valuation allowance
changes r ated to unrealized holding gains (losses) on
availabl -for-sale securities that are charged or credited
direct to the separate component of equity capital for
"A umulated other comprehensive income" (Schedu HC, item 26(b)).
Ineh1ee lffit beaefiffi frem e19erehfig less eerrybeeks reel
i:i!:ee Bliftflg the re19effiBg 19eriee. If the eeBsel:isetee
heldffig ee~eBy hes reelii'!eti tax aeBefits kem ef)eretiBg
less eftff)'fetwerss BliriHg lhe re19erlffig f)eriee, ea aet Bet
the seller IHB0tUlt ef these aeaefits egft:i:Bst the iBe0Hi0
taxes whieh wel:lle be e19191ieeale te iteHt 8, "IBeeHte
(less) aefere ewHeeble iaeeFHe laxes BBB eiseeatiaaee
0f'e£BtieBs." Repert the seller 8fH0tiBt ef iBeeme teltes
Bflf'tteeale ta item 8 ia this iteFH eae repert the t"eel:i:i!:es
ten beaefits ef eflenttiBg less eerryferwares grass iB
iteFH 11 , "Diseeatiattee ef'eretieas, aet ef Qf)fltteeale
iBeeffle taxes. "

Also include the dollar amount of any material adjustments or settlements reached with a taxing authority
(whether negotiated or adjudicated) relating to disputed
income taxes of prior years.
Exclude the estimated federal, state and local, and foreign income taxes applicable to:
(1) Item 11 , "Discontinued operations, net of applicable
taxes."
(2) Schedule HI-A, item 2, "Cumulative effect of changes
in accounting principles and corrections of material
accounting errors."
(3) Schedule HI-A, item 12, "Other comprehensive
income."

Line Item 10 Income (loss) before discontinued
operations.
Report the difference between item 8, "Income (loss)
before applicable income taxes and discontinued operations" and item 9, "Applicable income taxes (on item 8)."
If the amount is negative, report with a minus(-) sign.

Line Item 11 Discontinued operations, net of
applicable income taxes.
Rep01t the results of discontinued operations, if any, net
of applicable income taxes, as determined in accordance

HI-20

Schedule HI

FR Y-9C
Seplember 291 6

March 2018

!June 2017

I

DRAFT
Schedule HI
1$10 million

amounts for memoranda items 7(n) through 7(p), then
these items should be left blank.

Line Item MS Discontinued operations and
applicable income tax effect.
List and briefly describe in items M8(a) through M8(c)
below each of the discontinued operations included in
item 11, "Discontinued operations net of applicable
income taxes." However, each item should be reported
separately, gross of income taxes and the income tax
effect separately reported, as indicated.
If discontinued operations is a loss or otherwise redu s
the holding company's income, repmt with a minu (-)
sign. If an applicable income tax effect is a tax b efit
(rather than a tax expense), report with a minus (-

Line Item M9 Trading revenue (from cash
instruments and derivative instruments).
Memorandum items 9(a) through 9(e) are o be com­
pleted by holding companies that reported erage trad­
ing assets (in Schedule HC-K, item 4(a)) of $2 FFHlli0B or
more for any quarter of the preceding calendar year.
Memorandum items 9(f) and 9(g) are to be completed by
holding companies with $100 billion or more in total
assets that are required to complete Memorandum items
9(a) through 9(e).
Report, in Memorandum items 9(a) through 9(e) below, a
breakdown of trading revenue that has been included in
the body of the income statement in Schedule HI, item
5(c). For each of the four types of underlying risk
exposure, report the combined revenue (net gains and
losses) from trading cash instruments and derivative
instruments. For purposes of Memorandum item 9, the
reporting holding company should determine the under­
lying risk exposure category in which to report the
trading revenue from cash instruments and derivative
instruments in the same manner that the holding com­
pany makes this detemunation for other financial report­
ing purposes. The sum of Memorandum items 9(a)
through 9(e) must equal Schedule HI, item 5(c).

L ine Item M9(a) Interest rate exposures.
Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting
holding company manages as interest rate exposures.
Interest rate exposures may arise from cash debt instru­
ments (e.g., U.S. Treasury securities) and interest rate

Exclude trading revenue on contracts involving the
exchange of foreign cmTencies (e.g., cross-currency
swaps and currency options) that the reporting holding
company manages as foreign exchange exposures. Report
such trading revenue in Memorandum item 9(b).

Line Item M9(b) Foreign exchange exposures.
Repmt in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting
holding company manages as foreign exchange expo­
sures. Foreign exchange exposures may arise from cash
instruments (e.g., debt securities) denominated in non­
U.S. currencies and foreign exchange rate contracts.
Foreign exchange rate contracts are those contracts to
purchase foreign (non-US.) currencies and U.S. dollar
exchange in the forward market (i.e., on an organized
exchange or in an over-the-counter market). A purchase
of U.S. dollar exchange is equivalent to a sale of foreign
currency. Foreign exchange rate contracts include cross-.
currency interest rate swaps where there is an exchange
of principal, forward and spot foreign exchange con­
tracts, and currency futures and currency options.

Line Item M9(c) Equity security and index
exposures.
Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting
holding company manages as equity security and index
exposures. Equity security or index exposures may arise
from equity securities and equity security or index (i.e.,
equity derivative) contracts. Equity derivative contracts
are contracts that have a return, or a portion of their
return, linked to the price of a particular equity or to an
index of equity prices, such as the Standard and Poor' s
500.

Line Item M9(d)

Commodity and other exposures.

Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting
HI-25

FR Y-9C

Schedule HI Sep!emher 2916

contra s. Interest rate contracts are those contracts
relate to an interest-bearing financial inst:rnment or
who e cash flows are determined by referencing interest
rat or another interest rate contract (e.g., an option on a
res contract to purchase a Treasury bill). Interest rate
ntracts include single currency interest rate swaps,
asis swaps, forward rate agreements, and interest rate
options, including caps, floors, collars, and corridors.

March 2018

DRAFT
Schedule HI

NOTE: Memorandum items 9(a) and 9(b)
are to be completed by institutions with
$10 billion or more in total assets.

holding company manages as commodity or other expo­
during t e calendar year-to-date in the holding com­
sures. Commodity or other exposures may arise from
pany' oebit valuation adjustment (OVA). A DVA is the
commodities and commodity and other derivative con­
adj tment to the fair value of derivatives that accounts
tracts not reported as interest rate, foreign exchange,
f possible nonperf01mance of the holding company. It
equity, or credit derivative contracts. Commodity and
1s an estimate of the fair value of the holding company's
other contracts are contracts that have a return, or a
own credit risk to its counterparties.
portion of their return, linked to the price or to an inde
of precious metals, petroleum, lumber, agricultural prodr-_----------)-'>Line Item MlO Net gains (losses) recognized in
ucts, etc. Commodity and other contracts also include
earnings
on credit derivatives that economically
any other contracts that are not reportable as interest rate,
hedge
credit
exposures held outside the trading
foreign exchange, equity, or credit derivative contracts.

Line Item M9(e) Credit exposures.
Report in this item net gains (losses) from trading cash
instruments and derivative contracts that the reporting
holding company manages as credit exposures. Credit
exposures may arise from cash debt instruments (e.g.,
debt secmities) and credit derivative contracts. In gen­
eral, credit derivative contracts are arrangements that
allow one party (the "beneficiary") to transfer the credit
risk of a "reference asset" or "reference entity" to
another party (the "guarantor"). Credit derivative con­
tracts include credit default swaps, total return swaps,
credit options, and other credit derivatives.

Line Item M9(f) Impact on trading revenue of
changes in the creditworthiness of the holding
company's derivatives counterparties on the holding
company's derivative assets (included in
Memorandum items 9(a) through 9(e) above).
Report in this item the amount included in the trading
revenue reported in Schedule HI, Memorandum items
9(a) through 9(e), above that resulted from changes
File Typeapplication/pdfFile Modified2018-03-15File Created2017-06-01