Bank of Montreal 1999 Annual Report Download - page 90

Notes to Consolidated Financial Statements
84 Bank of Montreal Group of Companies 1999 Annual Report
Note 8 Other Assets
Note 9 Operating and Geographic Segmentation
Note 10 Deposits
We conduct our business through operating segments, each of
which has a distinct market and product mandate. Information
concerning the identification of these operating segments,
including disclosure of their revenues, expenses, net income,
Demand deposits Payable Payable on
Interest bearing Non-interest bearing after notice a fixed date Total
1999 1998 1999 1998 1999 1998 1999 1998 1999 1998
Deposits by:
Banks $ 201 $ 308 $ 493 $ 520 $ 244 $ 169 $ 29,460 $ 25,259 $ 30,398 $ 26,256
Businesses and governments 3,140 2,966 8,649 8,637 10,050 7,597 43,620 38,864 65,459 58,064
Individuals 1,827 2,065 1,937 1,582 25,213 24,238 32,040 31,778 61,017 59,663
Total $ 5,168 $ 5,339 $ 11,079 $ 10,739 $ 35,507 $ 32,004 $ 105,120 $ 95,901 $ 156,874 $ 143,983
Booked in:
Canada $ 4,617 $ 4,036 $ 6,440 $ 5,722 $ 25,351 $ 23,155 $ 50,164 $ 47,232 $ 86,572 $ 80,145
United States 498 957 4,620 4,986 9,954 8,694 30,003 28,724 45,075 43,361
Mexico
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Other countries 53 346 19 31 202 155 24,953 19,945 25,227 20,477
Total $ 5,168 $ 5,339 $ 11,079 $ 10,739 $ 35,507 $ 32,004 $ 105,120 $ 95,901 $ 156,874 $ 143,983
1999 1998
Accounts receivable, prepaid
expenses and other items $ 3,560 $ 3,736
Accrued interest receivable 1,289 1,633
Due from clients, dealers and brokers 849 1,474
Unrealized gains and amounts
receivable on derivative contracts 9,595 12,552
Future income taxes 343 261
Intangible assets and goodwill 688 793
Total $ 16,324 $ 20,449
Intangible Assets
Intangible assets which we acquire when we invest in subsidiaries or
other specific assets are recorded at their fair value at the time we make
the investment. The amount is amortized to income over the period
which we believe the assets will benefit us, generally not exceeding 20
years. We write down the assets to their fair value when the cash flows
are not expected to allow for recovery of the carrying value.
Goodwill
When we acquire a subsidiary or make other specific investments we
determine the fair value of the net tangible and intangible assets
acquiredandcomparethetotaltotheamountthatwepaidfortheinvest-
ments.
Any excess of the amount paid over fair value of those assets
is considered to be goodwill. This amount is deferred and amortized to
income over the period that we believe it will benefit us up to a maxi-
mum of 20 years. Goodwill is written down to its fair value when the
expected cash flows from the investment no longer support the carry-
ing value and the shortfall is other than temporary.
Change in Accounting Policy for Goodwill Presentation
The Canadian Institute of Chartered Accountants has approved a new
standard for presentation of goodwill amortization in the Consolidated
Statement of Income. The standard permits the presentation of goodwill
amortization on a net of tax basis and the disclosure of net income per
common share before goodwill in the Consolidated Statement of
Income. Our practices comply with the new standard.
average assets, loans and deposits, is encapsulated under the
heading of Client Group Reorganization on page 25 and in the
tables on pages 44 to 49 and pages 54 to 57 of our Management
Analysis of Operations.
The components of intangible assets and goodwill for each
major subsidiary are as follows:
1999 1998
Intangible assets
Harris Bankcorp, Inc. and subsidiaries $ 187 $ 217
Harris Bankmont, Inc. and subsidiaries 65 74
Bank of Montreal Mortgage Corporation 68
258 299
Goodwill
The Nesbitt Burns Corporation Limited
and subsidiaries 187 217
Harris Bankcorp, Inc. and subsidiaries 176 202
Harris Bankmont, Inc. and subsidiaries 64 75
Other 3 –
430 494
Total $ 688 $ 793
Amortization of intangible assets is recorded in our Consoli-
dated Statement of Income as:
1999 1998 1997
Non-interest expense $ 21 $ 24 $ 28
Interest expense 11 11 11
Total $ 32 $ 35 $ 39
Amortization of goodwill is recorded net of applicable income
tax, in our Consolidated Statement of Income, and is comprised
of the following:
1999 1998 1997
Goodwill $ 49 $ 48 $ 46
Income tax (benefit) (6) (6) (5)
Goodwill net of applicable tax $ 43 $ 42 $ 41