SEC Comment Letter for BANK OF AMERICA (BAC) — Feb 3, 2006
BANK OF AMERICA CORP /DE/ (BAC, BAC-PB, BAC-PE, BAC-PK, BAC-PL, BAC-PM, BAC-PN, BAC-PO, BAC-PP, BAC-PQ, BAC-PS, BML-PG, BML-PL) (CIK 0000070858)
Date: Feb. 3, 2006 · CIK: 0000070858 · Accession: 0000000000-06-006141
AI Filing Summary & Sentiment
Reasoning
Referenced dates: December 20, 2005, November 28, 2005
Letter
Mail Stop 4561 By U.S. Mail and facsimile to (704) 386-4579 Mr. Alvaro G. de Molina Chief Financial Officer Bank of America Corporation 100 N. Tryon Street Charlotte, NC 28255
Re: Bank of America Corporation Form 10-K filed March 1, 2005 File No. 1-06523
Dear Mr. de Molina:
We have reviewed your response letter dated December 20, 2005, and have the following comments. Please respond to these comments within 10 business days or tell us when you will provide us with a response.
* * * * * * *
Form 10-K filed March 1, 2005
Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Principles, page 90
1. We note your response to our prior comment 2 from our comment letter dated November 28, 2005. We understand that, due to some different interpretations of paragraph 10 of FIN 39, there is currently diversity in practice as to whether companies offset receivables or obligations related to cash collateral against the net derivative positions in the balance sheet. It appears that you have changed from one alternative interpretation of FIN 39 to another. Therefore, we believe a preferability letter would be appropriate. Refer to ASR 177.
Please tell us the facts and circumstances (including the reasons for the change) which led to your decision to begin netting the cash collateral in the fourth quarter of 2004. Please also tell us the quantifiable impact that this change in policy had upon your capital requirements, key performance ratios, and debt covenants, as applicable.
2. We note your response to our prior comment 3 from our comment letter dated November 28, 2005. We understand that during 2004, in order to be consistent with evolving industry practice, you began to record previously unrecognized gains and losses on derivative contracts held for trading purposes into income using the straight line method of amortization over the contractual life of the derivative contract. We understand that EITF 02-3 did not specifically address the timing and appropriate methodology for recognizing such previously deferred gains and losses. Please tell us whether you believe the change to a straight line amortization method represented a change in accounting policy and if not, the reasons why not.
3. If you believe the change to a straight line amortization method represented a change in accounting policy, please tell us:
* Whether you obtained a preferability letter from your accountants regarding this change and if not, the reasons why; and
* The quantifiable impact that this change in policy had upon your capital requirements, key performance ratios, and debt covenants, to the extent applicable.
* * * * * * *
Please furnish a response letter that keys your responses to our comments. Detailed letters greatly facilitate our review. Please file your response letter on EDGAR. Please understand that we may have additional comments after reviewing your responses to our comments.
You may contact Lisa Haynes, Staff Accountant at (202) 551- or me at (202) 551-3492 if you have questions.
Sincerely,
John P. Nolan
Accounting Branch Chief
Show Raw Text
<DOCUMENT>
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<TEXT>
February 3, 2006
Mail Stop 4561
By U.S. Mail and facsimile to (704) 386-4579
Mr. Alvaro G. de Molina
Chief Financial Officer
Bank of America Corporation
100 N. Tryon Street
Charlotte, NC 28255
Re: Bank of America Corporation
Form 10-K filed March 1, 2005
File No. 1-06523
Dear Mr. de Molina:
We have reviewed your response letter dated December 20,
2005, and have the following comments. Please respond to these
comments within 10 business days or tell us when you will provide
us
with a response.
* * * * * * *
Form 10-K filed March 1, 2005
Consolidated Financial Statements
Note 1 - Summary of Significant Accounting Principles, page 90
1. We note your response to our prior comment 2 from our comment
letter dated November 28, 2005. We understand that, due to some
different interpretations of paragraph 10 of FIN 39, there is
currently diversity in practice as to whether companies offset
receivables or obligations related to cash collateral against the
net
derivative positions in the balance sheet. It appears that you
have
changed from one alternative interpretation of FIN 39 to another.
Therefore, we believe a preferability letter would be appropriate.
Refer to ASR 177.
Please tell us the facts and circumstances (including the reasons
for
the change) which led to your decision to begin netting the cash
collateral in the fourth quarter of 2004. Please also tell us the
quantifiable impact that this change in policy had upon your
capital
requirements, key performance ratios, and debt covenants, as
applicable.
2. We note your response to our prior comment 3 from our comment
letter dated November 28, 2005. We understand that during 2004,
in
order to be consistent with evolving industry practice, you began
to
record previously unrecognized gains and losses on derivative
contracts held for trading purposes into income using the straight
line method of amortization over the contractual life of the
derivative contract. We understand that EITF 02-3 did not
specifically address the timing and appropriate methodology for
recognizing such previously deferred gains and losses. Please
tell
us whether you believe the change to a straight line amortization
method represented a change in accounting policy and if not, the
reasons why not.
3. If you believe the change to a straight line amortization
method
represented a change in accounting policy, please tell us:
* Whether you obtained a preferability letter from your
accountants
regarding this change and if not, the reasons why; and
* The quantifiable impact that this change in policy had upon your
capital requirements, key performance ratios, and debt covenants,
to
the extent applicable.
* * * * * * *
Please furnish a response letter that keys your responses to
our comments. Detailed letters greatly facilitate our review.
Please file your response letter on EDGAR. Please understand that
we
may have additional comments after reviewing your responses to our
comments.
You may contact Lisa Haynes, Staff Accountant at (202) 551-
3424
or me at (202) 551-3492 if you have questions.
Sincerely,
John P. Nolan
Accounting Branch Chief
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Mr. Alvaro G. de Molina
Bank of America Corporation
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