NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  Other  Earnings Per Share  Goodwill  Accounting and Reporting Developments  Transfers of Financial Assets  76 Fifth Third Bancorp During Step 2, the Bancorp determines the implied fair value  In June 2009, the FASB issued guidance amending the accounting  for the transfers of financial assets. This amended guidance  removed the concept of a QSPE, changed the requirements for  derecognizing financial assets and measuring gains or losses on  the sale of financial assets, and required additional disclosures  about transfers of financial assets and a transferor’s continuing  involvement in transferred financial assets. The amended guidance  was adopted by the Bancorp on January 1, 2010 on a prospective  basis and may impact the Bancorp’s structuring of securitizations  and other transfers of financial assets, including guaranteed  When required to perform Step 2, the Bancorp compares the  implied fair value of a reporting unit’s goodwill with the carrying  amount of that goodwill. If the carrying amount exceeds the  implied fair value, an impairment loss equal to that excess amount  is recognized. An impairment loss recognized cannot exceed the  carrying amount of that goodwill and cannot be reversed even if  the fair value of the reporting unit recovers.  The fair value of a reporting unit is the price that would be  received to sell the unit as a whole in an orderly transaction  between market participants at the measurement date. Since none  of the Bancorp’s reporting units are publicly traded, individual  reporting unit fair value determinations cannot be directly  correlated to the Bancorp’s stock price. To determine the fair  value of a reporting unit, the Bancorp employs an income-based  approach, utilizing the reporting unit’s forecasted cash flows  (including a terminal value approach to estimate cash flows  beyond the final year of the forecast) and the reporting unit’s  estimated cost of equity as the discount rate. Additionally, the  Bancorp determines its market capitalization based on the average  of the closing price of the Bancorp’s stock during the month  including the measurement date, incorporating an additional  control premium, and allocates this market-based fair value  measurement to the Bancorp’s reporting units in order to  corroborate the results of the income approach. Acquisitions of treasury stock are carried at cost. Reissuance  of shares in treasury for acquisitions, exercises of stock-based  awards or other corporate purposes is recorded based on the  specific identification method.  Advertising costs are generally expensed as incurred.  Securities sold under repurchase agreements are accounted  for as collateralized financing transactions and included in other  short-term borrowings in the Consolidated Balance Sheets at the  amounts which the securities were sold plus accrued interest.  Other intangible assets consist of core deposit intangibles,  customer lists, non-competition agreements and cardholder  relationships. Other intangibles are amortized on either a straight- line or an accelerated basis over their useful lives. The Bancorp  reviews other intangible assets for impairment whenever events or  changes in circumstances indicate that carrying amounts may not  be recoverable.  The Bancorp purchases life insurance policies on the lives of  certain directors, officers and employees and is the owner and  beneficiary of the policies. The Bancorp invests in these policies,  known as BOLI, to provide an efficient form of funding for long- term retirement and other employee benefits costs. The Bancorp  records these BOLI policies within other assets in the Consolidated Balance Sheets at each policy’s respective cash  surrender value, with changes recorded in other noninterest  income in the Consolidated Statements of Income.  Business combinations entered into by the Bancorp typically  include the acquisition of goodwill. U.S. GAAP requires goodwill  to be tested for impairment at the Bancorp’s reporting unit level  on an annual basis, which for the Bancorp is September 30, and  more frequently if events or circumstances indicate that there may  be impairment. The Bancorp has determined that its segments  qualify as reporting units under U.S. GAAP. Impairment exists  when a reporting unit’s carrying amount of goodwill exceeds its  implied fair value, which is determined through a two-step  impairment test. The first step (Step 1) compares the fair value of  a reporting unit with its carrying amount, including goodwill. If  the carrying amount of the reporting unit exceeds its fair value,  the second step (Step 2) of the goodwill impairment test is  performed to measure the impairment loss amount, if any.  The Bancorp calculates earnings per share pursuant to the  two-class method. The two-class method is an earnings allocation  formula that determines earnings per share separately for common  stock and participating securities according to dividends declared  and participation rights in undistributed earnings. For purposes of  calculating earnings per share under the two-class method,  restricted shares that contain nonforfeitable rights to dividends are  considered participating securities until vested. While the dividends declared per share on such restricted shares are the  same as dividends declared per common share outstanding, the  dividends recognized on such restricted shares may be less  because dividends paid on restricted shares that are expected to be  forfeited are reclassified to compensation expense during the  period when forfeiture is expected. In accordance with U.S. GAAP, basic earnings per share is  computed by dividing net income available to common shareholders by the weighted-average number of shares of  common stock outstanding during the period. Earnings per  diluted share is computed by dividing adjusted net income  available to common shareholders by the weighted-average  number of shares of common stock and common stock  equivalents outstanding during the period. Dilutive common stock  equivalents represent the assumed conversion of dilutive convertible preferred stock and the exercise of dilutive stock- based awards and warrants. of goodwill for a reporting unit by assigning the fair value of the  reporting unit to all of the assets and liabilities of that unit  (including any unrecognized intangible assets) as if the reporting  unit had been acquired in a business combination. The excess of  the fair value of the reporting unit over the amounts assigned to  its assets and liabilities is the implied fair value of goodwill. This  assignment process is only performed for purposes of testing  goodwill for impairment. The Bancorp does not adjust the  carrying values of recognized assets or liabilities (other than  goodwill, if appropriate), nor recognize previously unrecognized  intangible assets in the Consolidated Financial Statements as a  result of this assignment process. Refer to Note 10 for further  information regarding the Bancorp’s goodwill.  Securities and other property held by Fifth Third Investment  Advisors, a division of the Bancorp’s banking subsidiary, in a  fiduciary or agency capacity are not included in the Consolidated  Balance Sheets because such items are not assets of the  subsidiaries. Investment advisory revenue in the Consolidated  Statements of Income is recognized on the accrual basis.  Investment advisory service revenues are recognized monthly  based on a fee charged per transaction processed and/or a fee  charged on the market value of average account balances  associated with individual contracts. The Bancorp recognizes revenue from its card and processing services on an accrual basis as such services are  performed, recording revenues net of certain costs (primarily  interchange fees charged by credit card associations) not controlled by the Bancorp.