Statement of Financial Condition
UBS Securities LLC
Notes to the Statement of Financial Condition (continued)
(In Thousands)
2. Significant Accounting Policies (continued)
Leases (continued)
The RoU asset is adjusted by the difference between the straight-line cost for the period (including
amortization of initial direct costs) and the periodic accretion of the lease liability.
Lease payments generally include fixed payments and / or variable payments that depend on an
index (such as an inflation index).
When the lease contains an extension or termination option that the Company considers reasonably
certain to be exercised, the expected rental payments or costs of termination are included within
the lease payments used to generate the lease liability. The Company does not typically enter into
leases with purchase options or residual value guarantees.
Lease receivables are subject to assessment for impairment.
Credit Losses
For financial assets carried at amortized cost the Company estimates the allowance for credit losses
under the Current Expected Credit Losses ("CECL") model, which requires measurement of
expected credit losses based on historical experience, current conditions and reasonable and
supportable forecasts over the contractual life of the financial assets.
The Company applies the practical expedient to collateralized agreements secured by collateral
maintenance provisions which measures the allowance for expected credit losses by comparing
the amortized cost basis of the financial asset with the fair value of collateral at the measurement
date. This election may result in an estimate of zero expected credit losses when collateral levels
are required to be adjusted and replenished to be equal to or greater than the amortized cost basis
of the financial assets.
Translation of Foreign Currencies
Assets and liabilities denominated in foreign currencies are translated at year-end rates of
exchange.
Income Taxes
The Company is treated as a partnership for U.S. federal, state and local income tax purposes. As
such, the Company is not required to provide for or pay any U.S. federal income taxes. All income,
expense, gain or loss of the Company flows through to its partners and is allocated in accordance
with the LLC agreement and related tax law. Generally, the federal, state and local income tax on
such income is the responsibility of the partners.
The Company is itself subject to New York City Unincorporated Business Tax ("UBT"), Illinois
Property Replacement Tax and Tennessee Excise Tax for which it accrues current and deferred
taxes. Additionally, the Company is treated as a corporation for Canadian tax purposes. As such,
the Company accrues and pays corporate income tax on its income generated in Canada.View entire presentation