Citigroup Inc.

Investments in Certain Entities that Calculate NetAsset Value per ShareAs of December 31, 2009, the Company adopted Accounting Standards Update(ASU) No. 2009-12, Investments in Certain Entities that Calculate Net AssetValue per Share (or its Equivalent), which provides guidance on measuringthe fair value of certain alternative investments. The ASU permits entities touse net asset value as a practical expedient to measure the fair value of theirinvestments in certain investment funds. The ASU also requires additionaldisclosures regarding the nature and risks of such investments and providesguidance on the classification of such investments as Level 2 or Level 3 ofthe fair value hierarchy. This ASU did not have a material impact on theCompany’s accounting for its investments in alternative investment funds.Multiple Foreign Exchange RatesIn May 2010, the FASB issued ASU 2010-19, Foreign Currency Issues:Multiple Foreign Currency Exchange Rates. The ASU requires certaindisclosure in situations when an entity’s reported balances in U.S. dollarmonetary assets held by its foreign entities differ from the actual U.S.dollar-denominated balances due to different foreign exchange rates used inremeasurement and translation. The ASU also clarifies the reporting for thedifference between the reported balances and the U.S. dollar-denominatedbalances upon the initial adoption of highly inflationary accounting. TheASU does not have a material impact on the Company’s accounting.Effect of a Loan Modification When the Loan Is Part of aPool Accounted for as a Single Asset (ASU No. 2010-18)In April 2010, the FASB issued ASU No. 2010-18, Effect of a LoanModification When the Loan is Part of a Pool Accounted for as a SingleAsset. As a result of the amendments in this ASU, modifications of loansthat are accounted for within a pool do not result in the removal of thoseloans from the pool, even if the modification of those loans would otherwisebe considered a troubled debt restructuring. An entity will continue to berequired to consider whether the pool of assets in which the loan is includedis impaired if expected cash flows for the pool change. The ASU was effectivefor reporting periods ending on or after July 15, 2010. The ASU had nomaterial effect on the Company’s financial statements.FASB Launches Accounting Standards CodificationThe FASB issued FASB Statement No. 168, The FASB Accounting StandardsCodification and the Hierarchy of Generally Accepted AccountingPrinciples (now ASC 105, Generally Accepted Accounting Principles).The statement establishes the FASB Accounting Standards Codification(Codification or ASC) as the single source of authoritative U.S. generallyaccepted accounting principles (GAAP) recognized by the FASB to be appliedby nongovernmental entities. Rules and interpretive releases of the Securitiesand Exchange Commission (SEC) under authority of federal securities lawsare also sources of authoritative GAAP for SEC registrants. The Codificationsupersedes all existing non-SEC accounting and reporting standards. Allother nongrandfathered, non-SEC accounting literature not included in theCodification has become nonauthoritative.Following the Codification, the Board will not issue new standards inthe form of Statements, FASB Staff Positions or Emerging Issues Task ForceAbstracts. Instead, it will issue Accounting Standards Updates (ASU), whichwill serve to update the Codification, provide background informationabout the guidance and provide the basis for conclusions on the changes tothe Codification.GAAP is not intended to be changed as a result of the FASB’s Codificationproject, but what does change is the way the guidance is organized andpresented. As a result, these changes have a significant impact on howcompanies reference GAAP in their financial statements and in theiraccounting policies for financial statements issued for interim and annualperiods ending after September 15, 2009.Citigroup is providing references to the Codification topics alongsidereferences to the predecessor standards.Interim Disclosures about Fair Value of FinancialInstrumentsIn April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, InterimDisclosures about Fair Value of Financial Instruments, (now ASC 825-10-50-10, Financial Instruments: Fair Value of Financial Instruments).This FSP requires disclosure of qualitative and quantitative informationabout the fair value of financial instruments on a quarterly basis, includingmethods and significant assumptions used to estimate fair value during theperiod. These disclosures were previously only provided annually.The disclosures required by this FSP were effective for the quarterended June 30, 2009. This FSP has no effect on how Citigroup accounts forthese instruments.Measurement of Fair Value in Inactive MarketsIn April 2009, the FASB issued FSP FAS 157-4, Determining Fair ValueWhen the Volume and Level of Activity for the Asset or Liability HaveSignificantly Decreased and Identifying Transactions That Are NotOrderly (now ASC 820-10-35-51A, Fair Value Measurements andDisclosures: Determining Fair Value When the Volume and Level ofActivity for the Asset or Liability Have Significantly Decreased). The FSPreaffirms that fair value is the price that would be received to sell an assetor paid to transfer a liability in an orderly transaction between marketparticipants at the measurement date under current market conditions.The FSP also reaffirms the need to use judgment in determining whether aformerly active market has become inactive and in determining fair valueswhen the market has become inactive. The adoption of the FSP had no effecton the Company’s Consolidated Financial Statements.172