JP Morgan Chase 2008 Annual Report Download - page 127

JPMorgan Chase & Co./ 2008 Annual Report 125
expected effective date in January 2010. Entities expected to be
impacted include revolving securitization entities, bank-administered
asset-backed commercial paper conduits, and certain mortgage secu-
ritization entities. The Firm is monitoring the FASB’s deliberations on
these proposed amendments and continues to evaluate their poten-
tial impact. The ultimate impact of the Firm will depend upon the
guidance issued by the FASB in a final statement amending SFAS
140 and FIN 46R.
Determining the fair value of an asset when the market for
that asset is not active
In October 2008, the FASB issued FSP FAS 157-3, which clarifies the
application of SFAS 157 in a market that is not active and provides
an example to illustrate key considerations in determining the fair
value of a financial instrument when the market for that financial
asset is not active. The FSP was effective upon issuance, including
prior periods for which financial statements have not been issued.
The application of this FSP did not have an impact on the Firm’s
Consolidated Balance Sheets or results of operations.
Disclosure about transfers of financial assets and interests
in VIEs
On December 11, 2008, the FASB issued FSP FAS 140-4 and FIN
46(R)-8, which requires additional disclosures relating to transfers of
financial assets and interests in securitization entities and other vari-
able interest entities. The purpose of this FSP is to require improved
disclosure by public enterprises prior to the effective dates of the
proposed amendments to SFAS 140 and FIN 46(R). The effective date
for the FSP is for reporting periods (interim and annual) beginning
with the first reporting period that ends after December 15, 2008.
The disclosures required by this FSP are incorporated in this Annual
Report. FSP SFAS 140-4 and FIN 46(R)-8 only affects JPMorgan
Chase’s disclosure of transfers of financial assets and interests in
securitization entities and other variable interest entities and not its
Consolidated Balance Sheets, Consolidated Statements of Income or
Consolidated Statements of Cash Flows.
Employers’ disclosures about postretirement benefit plan
assets
In December 2008, the FASB issued FSP FAS 132(R)-1, which
requires more detailed disclosures about employers’ plan assets,
including investment strategies, major categories of plan assets, con-
centrations of risk within plan assets, and valuation techniques used
to measure the fair value of plan assets. This FSP is effective for fiscal
years ending after December 15, 2009. The Firm intends to adopt
these additional disclosure requirements on the effective date.
Amendments to the impairment guidance of EITF Issue No.
99-20
In January 2009, the FASB issued FSP EITF 99-20-1, which amends
the impairment guidance in EITF 99-20 to make the investment secu-
rity impairment model in EITF 99-20 more consistent with the securi-
ties impairment model in SFAS 115. FSP EITF 99-20-1 removes the
requirement that a holder’s best estimate of cash flows be based
exclusively upon those that a market participant would use and
allows for reasonable judgment to be applied in considering whether
an adverse change in cash flows has occurred based on all available
information relevant to the collectibility of the security. FSP EITF 99-
20-1 is effective for interim and annual periods ending after
December 15, 2008, and therefore the Firm has adopted FSP EITF
99-20-1 as of December 31, 2008. The adoption of this FSP did not
have a material impact on the Firm’s Consolidated Balance Sheets or
results of operations.