1.0.0.3 false Nature of Operations and Significant Accounting Policies false 1 $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDPerShare Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Notes to Consolidated Financial Statements 0 pfg_NotesToConsolidatedFinancialStatementsAbstract pfg false na duration string Footnote disclosures that provide additional details to specific information summarized in the consolidated financial... false false false false false true false false false 1 false false 0 0 false false Footnote disclosures that provide additional details to specific information summarized in the consolidated financial statements to comply with GAAP disclosure requirements. false 3 Nature of Operations and Significant Accounting Policies 1 pfg_NatureOfOperationsAndSignificantAccountingPoliciesTextBlock pfg false na duration string Includes, but is not limited to, description containing the entire organization, consolidation and basis of presentation of... false false false false false false false false false 1 false false 0 0 <table style="font-size:10pt; font-family:'Times New Roman',times,serif;"> <tr> <td> 1. Nature of Operations and Significant Accounting Policies   Basis of Presentation   <p style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.5in; FONT-FAMILY: Times New Roman; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none"> The accompanying unaudited consolidated financial statements of Principal Financial Group, Inc. (PFG), its majority-owned subsidiaries and its consolidated variable interest entities (VIEs), have been prepared in conformity with accounting principles generally accepted in the U.S. (U.S. GAAP) for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2009, are not necessarily indicative of the results that may be expected for the year ended December 31, 2009. These interim unaudited consolidated financial statements should be read in conjunction with our annual audited financial statements as of December 31, 2008, included in our Form 10-K for the year ended December 31, 2008, filed with the United States Securities and Exchange Commission (SEC). The accompanying consolidated statement of financial position as of December 31, 2008, has been derived from the audited consolidated statement of financial position but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.   We have evaluated subsequent events through November 4, 2009, which was the date our consolidated financial statements were issued.   Reclassifications have been made to prior period financial statements to conform to the September 30, 2009, presentation. See Recent Accounting Pronouncements for impact of new accounting guidance on prior period financial statements.   Recent Accounting Pronouncements   On September 30, 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2009-12, Fair Value Measurements and Disclosures (Topic 820), Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent) (ASU 2009-12). ASU 2009-12 provides guidance on measuring the fair value of certain alternative investments, and amends Accounting Standards Codification (ASC) Topic 820 to offer investors a practical means for measuring the fair value of investments in certain entities that calculate net asset value per share. ASU 2009-12 is effective for periods ending after December 15, 2009. We are evaluating the impact this guidance will have on our consolidated financial statements.   On August 28, 2009, the FASB issued ASU No. 2009-05, Fair Value Measurements and Disclosures (Topic 820), Measuring Liabilities at Fair Value (ASU 2009-05), to provide additional guidance on measuring the fair value of liabilities. ASU 2009-05 clarifies that the quoted price for the identical liability, when traded as an asset in an active market, is also a Level 1 measurement for that liability when no adjustment to the quoted price is required. In the absence of a quoted price in an active market, an entity must use one or more of the following valuation techniques to estimate fair value: (1) a valuation technique that uses a quoted price: (a) of an identical liability when traded as an asset or (b) of a similar liability when traded as an asset; (2) another valuation technique such as (a) a present value technique or (b) a technique based on the amount an entity would pay to transfer the identical liability or would receive to enter into an identical liability. ASU 2009-05 will be effective for us for fourth quarter 2009 reporting and is not expected to have a material impact on our consolidated financial statements.   <p style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.5in; FONT-FAMILY: Times New Roman; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none; mso-layout-grid-align: none"> On June 30, 2009, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162, which was subsequently incorporated into ASC Subtopic 105-10, Generally Accepted Accounting Principles Overall. This guidance replaces The Hierarchy of Generally Accepted Accounting Principles and establishes the FASB Accounting Standards CodificationTM (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. This guidance was effective for financial statements issued for interim and annual periods ending after September 15, 2009, and did not have a material impact on our consolidated financial statements.   <p style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.5in; FONT-FAMILY: Times New Roman; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none; mso-layout-grid-align: none"> On June 12, 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (SFAS 166). The objective of SFAS 166 is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial reports about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferors continuing involvement in transferred financial assets. The most significant change is the elimination of the concept of a qualifying special-purpose entity. Therefore, formerly qualifying special-purpose entities (as defined under previous accounting standards) should be evaluated for consolidation by reporting entities on and after the effective date in accordance with the applicable consolidation guidance. SFAS 166 will be effective for us on January 1, 2010. Earlier adoption is prohibited. We are evaluating the impact this guidance will have on our consolidated financial statements.   <p style="MARGIN: 0in 0in 0pt; COLOR: black; TEXT-INDENT: 0.5in; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: '??????Pro W3'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none; mso-bidi-font-family: 'Times New Roman'; mso-fareast-language: #0400; mso-style-name: 'Free Form'; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt"> Also on June 12, 2009, the FASB issued SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167). SFAS 167 amends FASB Interpretation No. 46(R), to require an enterprise to perform an analysis to determine whether the enterprises variable interest or interests give it a controlling financial interest in a VIE. This analysis identifies the primary beneficiary of a VIE as the enterprise that has (1) the power to direct the activities of a VIE that most significantly impact the entitys economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be significant to the VIE. SFAS 167 requires ongoing reassessments of whether an enterprise is the primary beneficiary of a VIE. In addition, SFAS 167 requires enhanced disclosures that will provide users of financial statements with more transparent information about an enterprises involvement in a VIE. The enhanced disclosures are required for any enterprise that holds a variable interest in a VIE. SFAS 167 will be effective for us on January 1, 2010. Earlier adoption is prohibited. We are evaluating the impact this guidance will have on our consolidated financial statements. <p style="MARGIN: 0in 0in 0pt; COLOR: black; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: '??????Pro W3'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none; mso-bidi-font-family: 'Times New Roman'; mso-fareast-language: #0400; mso-style-name: 'Free Form'; tab-stops: 28.0pt 56.0pt 84.0pt 112.0pt 140.0pt 168.0pt 196.0pt 224.0pt 3.5in 280.0pt 308.0pt 336.0pt">   On April 9, 2009, the FASB issued FASB Staff Position (FSP) FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS 115-2), which was subsequently incorporated into ASC Subtopic 320-10, Investments Debt and Equity Securities Overall. This new guidance relates to the recognition and presentation of an other-than-temporary impairment (OTTI) and requires additional disclosures. The recognition provisions apply only to debt securities classified as available-for-sale and held-to-maturity, while the presentation and disclosure requirements apply to both debt and equity securities. An impaired debt security will be considered other-than-temporarily impaired if a holder has the intent to sell, or it more likely than not will be required to sell prior to recovery of the amortized cost. If a holder of a debt security does not expect recovery of the entire cost basis, even if there is no intention to sell the security, it will be considered an OTTI as well. This guidance also changes how an entity recognizes an OTTI for a debt security by separating the loss between the amount representing the credit loss and the amount relating to other factors, if a holder does not have the intent to sell or it more likely than not will not be required to sell prior to recovery of the amortized cost less any current period credit loss. Credit losses will be recognized in net income and losses relating to other factors will be recognized in other comprehensive income (OCI). If the holder has the intent to sell or it more likely than not will be required to sell before its recovery of amortized cost less any current period credit loss, the entire OTTI will continue to be recognized in net income. Furthermore, this guidance requires a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption with a corresponding adjustment to accumulated OCI. We adopted this guidance effective January 1, 2009. The cumulative change in accounting principle from adopting this guidance resulted in a net $9.9 million increase to retained earnings and a corresponding decrease to accumulated OCI. The required disclosures have been included in our consolidated financial statements.   <p style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.5in; FONT-FAMILY: Times New Roman; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none"> On April 9, 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, which was subsequently incorporated into ASC Subtopic 820-10, Fair Value Measurements and Disclosures - Overall. This guidance provides additional information on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market activity for the asset or liability and clarifies that the use of multiple valuation techniques may be appropriate. It also provides additional guidance on circumstances that may indicate a transaction is not orderly. Further, it requires additional disclosures about fair value measurements in annual and interim reporting periods. We adopted this guidance effective January 1, 2009, and it did not have a material impact on our consolidated financial statements. See Note 9, Fair Value of Financial Instruments, for further details.   <p style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0.5in; FONT-FAMILY: Times New Roman; mso-bidi-font-size: 10.0pt; mso-fareast-font-family: 'Times New Roman'; mso-pagination: none; mso-style-parent: ''; mso-hyphenate: none"> Also on April 9, 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures About Fair Value ofFinancial Instruments, which was subsequently incorporated into ASC Subtopic 825-10, Financial Instruments Overall. This guidance extends the annual disclosure requirements of carrying value and estimated fair value of financial instruments to interim financial statements of public companies. We adopted this guidance effective April 1, 2009. The required disclosures have been included in Note 9, Fair Value of Financial Instruments.   On March 19, 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133, which was subsequently incorporated into ASC Subtopic 815-10, Derivatives and Hedging Overall. This guidance requires (1) qualitative disclosures about objectives and strategies for using derivatives, (2) quantitative disclosures about fair value amounts of gains and losses on derivative instruments and related hedged items and (3) disclosures about credit-risk-related contingent features in derivative instruments. The disclosures are intended to provide users of financial statements with an enhanced understanding of how and why derivative instruments are used, how they are accounted for and the financial statement impacts. We adopted these changes on January 1, 2009. See Note 3, Derivative Financial Instruments, for further details.   On December 4, 2007, the FASB issued SFAS No. 141(R), Business Combinations, which was subsequently incorporated into ASC Subtopic 805-10, Business Combinations-Overall. Among the changes, the standard requires that the acquiring entity in a business combination establish the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, including any noncontrolling interests, and requires the acquirer to disclose additional information needed to more comprehensively evaluate and understand the nature and financial effect of the business combination. In addition, direct acquisition costs are to be expensed. We adopted this guidance on January 1, 2009, and all requirements are applied prospectively.   Also on December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements an Amendment of Accounting Research Bulletin No. 51, which was subsequently incorporated into ASC Subtopic 815-10, Consolidation-Overall. The following changes to noncontrolling interests were mandated as part of this new guidance: (1) Noncontrolling interests are to be treated as a separate component of equity, rather than as a liability or other item outside of equity. (2) Net income includes the total income of all consolidated subsidiaries, with separate disclosures on the face of the statement of operations of the income attributable to controlling and noncontrolling interests. Previously, net income attributable to the noncontrolling interest was reported as an operating expense in arriving at consolidated net income. (3) This guidance revises the accounting requirements for changes in a parents ownership interest when the parent retains control and for changes in a parents ownership interest that results in deconsolidation. We adopted this guidance on January 1, 2009. Presentation and disclosure requirements have been applied retrospectively for all periods presented. All other requirements should be applied prospectively. Certain separate account arrangements involve ownership of mutual funds to support the investment objective of the separate account. It is possible that, through a separate account arrangement, greater than 50% of the mutual fund shares could be owned. The accounting guidance for this circumstance is not well defined, but we, like many other insurers, do not consolidate the mutual fund as we believe the arrangement qualifies for the exemption afforded investment companies. In January 2009, the FASB asked the Emerging Issues Task Force (EITF) to consider a topic entitled Consideration of an Insurers Accounting for Majority Owned Investments When the Ownership is through a Separate Account. On September 30, 2009, the FASB issued proposed ASU Financial Services Insurance (Topic 944), Consideration of an Insurers Accounting for Majority-Owned Investments When Ownership is Through a Separate Account.  The comment period for this proposed ASU ends on October 26, 2009, and while the final outcome is uncertain, the guidance as exposed supports our position.   Separate Accounts   As of September 30, 2009, and December 31, 2008, the separate accounts include a separate account valued at $222.2 million and $207.4 million, respectively, which primarily includes shares of our stock that were allocated and issued to eligible participants of qualified employee benefit plans administered by us as part of the policy credits issued under our 2001 demutualization. These shares are included in both basic and diluted earnings per share calculations. The separate account shares are recorded at fair value and are reported as separate account assets and separate account liabilities in the consolidated statements of financial position. Changes in fair value of the separate account shares are reflected in both the separate account assets and separate account liabilities and do not impact our results of operations.</td></tr></table> 1. Nature of Operations and Significant Accounting Policies   Basis of Presentation   The accompanying unaudited consolidated financial false false Includes, but is not limited to, description containing the entire organization, consolidation and basis of presentation of financial statements disclosure; description of new accounting pronouncements, the method of adoption and impacts of adoption; and description of significant accounting policies of the reporting entity. 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