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Reorganization and Fresh Start Accounting Pro-Forma Adjustments (Tables) | 3 Months Ended
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Mar. 31, 2013
Text Block [Abstract] |
Schedule of Reorganization Plan and Adoptions of Fresh Start Accounting | The unaudited pro-forma adjustments presented below summarize the impact of the Reorganization Plan and adoptions of fresh start accounting as if the Fresh Start Reporting Date had occurred on March 31, 2013. AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES Pro-Forma Fresh Start Consolidated Balance Sheet
|  | Predecessor March 31, 2013 |  |  | Reorganization Items (1) |  |  | Fresh Start Adjustments (2) |  |  | Successor Pro-Forma March 31, 2013 |
(Dollars in Thousands, Except per Share Data) |  | (Unaudited) |  |  | (Unaudited) |  |  | (Unaudited) |  |  | (Unaudited) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments |  | $ | 6,512,262 |  |  | $ | (101,900 | ) |  | $ | — |  |  | $ | 6,410,362 |
Cash |  |  | 53,135 |  |  |  |  |  |  |  |  |  |  |  | 53,135 |
Receivable for securities sold |  |  | 40,822 |  |  |  |  |  |  |  |  |  |  |  | 40,822 |
Investment income due and accrued |  |  | 33,944 |  |  |  |  |  |  |  |  |  |  |  | 33,944 |
Premium receivables |  |  | 1,543,098 |  |  |  |  |  |  |  |  |  |  |  | 1,543,098 |
Reinsurance recoverable on paid and unpaid losses |  |  | 160,682 |  |  |  |  |  |  |  |  |  |  |  | 160,682 |
Deferred ceded premium |  |  | 170,032 |  |  |  |  |  |  |  |  |  |  |  | 170,032 |
Subrogation recoverable |  |  | 545,007 |  |  |  |  |  |  |  |  |  |  |  | 545,007 |
Deferred acquisition costs |  |  | 192,306 |  |  |  |  |  |  |  | (192,306 | ) |  |  | — |
Loans |  |  | 8,691 |  |  |  |  |  |  |  | (1,572 | ) |  |  | 7,119 |
Derivative assets |  |  | 112,811 |  |  |  |  |  |  |  |  |  |  |  | 112,811 |
Current taxes |  |  | — |  |  |  | 4,626 |  |  |  |  |  |  |  | 4,626 |
Insurance intangible |  |  | — |  |  |  |  |  |  |  | 2,345,268 |  |  |  | 2,345,268 |
Goodwill |  |  | — |  |  |  |  |  |  |  | 286,956 |  |  |  | 286,956 |
Other assets |  |  | 40,365 |  |  |  |  |  |  |  |  |  |  |  | 40,365 |
Variable interest entity assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed income securities, at fair value |  |  | 2,414,607 |  |  |  |  |  |  |  |  |  |  |  | 2,414,607 |
Restricted cash |  |  | 2,258 |  |  |  |  |  |  |  |  |  |  |  | 2,258 |
Investment income due and accrued |  |  | 1,338 |  |  |  |  |  |  |  |  |  |  |  | 1,338 |
Loans |  |  | 14,327,840 |  |  |  |  |  |  |  | (9,006 | ) |  |  | 14,318,834 |
Other assets |  |  | 5,462 |  |  |  |  |  |  |  |  |  |  |  | 5,462 |
Total assets |  | $ | 26,164,660 |  |  | $ | (97,274 | ) |  | $ | 2,429,340 |  |  | $ | 28,496,726 |
Liabilities and Stockholders’ Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Liabilities subject to compromise |  | $ | 1,704,641 |  |  | $ | (1,704,641 | ) |  | $ | — |  |  | $ | — |
Unearned premiums |  |  | 2,623,445 |  |  |  |  |  |  |  |  |  |  |  | 2,623,445 |
Loss and loss expense reserve |  |  | 6,590,216 |  |  |  |  |  |  |  |  |  |  |  | 6,590,216 |
Ceded premiums payable |  |  | 92,085 |  |  |  |  |  |  |  |  |  |  |  | 92,085 |
Obligations under investment agreements |  |  | 357,371 |  |  |  |  |  |  |  | (1,144 | ) |  |  | 356,227 |
Obligations under investment repurchase agreements |  |  | 5,926 |  |  |  |  |  |  |  | 55 |  |  |  | 5,981 |
Deferred taxes |  |  | 1,540 |  |  |  |  |  |  |  | 168,373 |  |  |  | 169,913 |
Current taxes |  |  | 97,274 |  |  |  | (97,274 | ) |  |  |  |  |  |  | — |
Long-term debt |  |  | 153,873 |  |  |  |  |  |  |  | 732,938 |  |  |  | 886,811 |
Accrued interest payable |  |  | 246,378 |  |  |  |  |  |  |  | (22,184 | ) |  |  | 224,194 |
Derivative liabilities |  |  | 505,746 |  |  |  |  |  |  |  |  |  |  |  | 505,746 |
Other liabilities |  |  | 91,057 |  |  |  |  |  |  |  |  |  |  |  | 91,057 |
Payable for securities purchased |  |  | 17,051 |  |  |  |  |  |  |  |  |  |  |  | 17,051 |
Variable interest entity liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued interest payable |  |  | 828 |  |  |  |  |  |  |  |  |  |  |  | 828 |
Long-term debt |  |  | 14,229,373 |  |  |  |  |  |  |  | (22,167 | ) |  |  | 14,207,206 |
Derivative liabilities |  |  | 2,317,625 |  |  |  |  |  |  |  |  |  |  |  | 2,317,625 |
Other liabilities |  |  | 301 |  |  |  |  |  |  |  |  |  |  |  | 301 |
Total liabilities |  | $ | 29,034,730 |  |  | $ | (1,801,915 | ) |  | $ | 855,871 |  |  | $ | 28,088,686 |
Stockholders’ deficit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Common stock – Predecessor Ambac |  |  | 3,080 |  |  |  |  |  |  |  | (3,080 | ) |  |  | — |
Common stock – Successor Ambac |  |  | — |  |  |  | 450 |  |  |  |  |  |  |  | 450 |
Additional paid-in capital – Predecessor Ambac |  |  | 2,172,027 |  |  |  |  |  |  |  | (2,172,027 | ) |  |  | — |
Additional paid-in capital – Successor Ambac |  |  | — |  |  |  | 184,550 |  |  |  | — |  |  |  | 184,550 |
Accumulated other comprehensive income |  |  | 720,071 |  |  |  |  |  |  |  | (720,071 | ) |  |  | — |
Accumulated deficit |  |  | (6,015,025 | ) |  |  | 1,519,641 |  |  |  | 4,495,384 |  |  |  | — |
Common stock held in treasury at cost |  |  | (410,695 | ) |  |  |  |  |  |  | 410,695 |  |  |  | — |
Total Ambac Financial Group, Inc. stockholders’ deficit |  |  | (3,530,542 | ) |  |  | 1,704,641 |  |  |  | 2,010,901 |  |  |  | 185,000 |
Noncontrolling interest |  |  | 660,472 |  |  |  |  |  |  |  | (437,432 | ) |  |  | 223,040 |
Total stockholders’ deficit |  |  | (2,870,070 | ) |  |  | 1,704,641 |  |  |  | 1,573,469 |  |  |  | 408,040 |
Total liabilities and stockholders’ deficit |  | $ | 26,164,660 |  |  | $ | (97,274 | ) |  | $ | 2,429,340 |  |  | $ | 28,496,726 |
(1) | Reorganization items: Represents amounts recorded for the implementation of the Reorganization Plan on the Fresh Start Reporting Date. This includes the settlement of pre-petition liabilities, cash payments to the IRS under the IRS Settlement, and the distribution of new shares of Ambac common stock and warrants to pre-petition creditors.
(2) | Fresh start adjustments: Represents the following fresh start adjustments:
| • |  | Adjusting the basis of all assets, liabilities and non-controlling interests to fair value for those items which are not already reported at fair value under U.S. GAAP accounting rules:
| • |  | Loans, Obligations under investment agreements, Long-term debt, VIE Loans and VIE Long-term debt: Refer to Note 7—Fair Value Measurements, for a discussion of the valuation methodologies used to estimate fair value for these line items.
| • |  | Insurance intangible: Represents the fair value adjustment for financial guarantee insurance and reinsurance contracts. Pursuant to the business combinations guidance for insurance entities in ASC Topic 944-805, insurance and reinsurance assets and liabilities continue to be measured in accordance with existing accounting policies and an intangible asset is recorded representing the difference between the fair value and carrying value of these insurance and reinsurance assets and liabilities. As a result, the carrying value of our financial guarantee insurance and reinsurance contracts will continue to be reported and measured in accordance with ASC Topic 944. These line items primarily comprise Premiums receivable, Reinsurance recoverable on paid and unpaid losses, Deferred ceded premium, Subrogation recoverable, Loss and loss expense reserve, and Ceded premiums payable. Refer to Note 7—Fair Value Measurements, for a discussion of the valuation methodology used to estimate fair value for financial guarantee insurance contracts. Also note that certain insurance-related balance sheet items that do not represent future cash cash flows, such as deferred acquisitions costs, are written off at the Fresh Start Reporting Date.
| • |  | Non-controlling interests: The fair value adjustment is based on current quotes from market sources.
| • |  | Recording the deferred tax impact of the above fair value adjustments in accordance with ASC Topic 852.
| • |  | Recording goodwill for the excess of the reorganization value over the fair value of the identifiable assets.
| • |  | Cancelling the predecessor’s common and preferred stock and eliminating the predecessor’s additional paid-in capital, accumulated other comprehensive income, accumulated deficit and treasury stock.

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- Definition Tabular disclosure of description and proforma amounts of adjustments to historical balance sheet to arrive at proforma fresh-start amounts following bankruptcy and reorganization with a different owner. + References No definition available. + Details
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