JP Morgan Chase 2010 Annual Report Download - page 242

Notes to consolidated financial statements
242 JPMorgan Chase & Co./2010 Annual Report
2010
Year ended December 31,
(in millions) Wholesale
Consumer,
excluding credit card Credit Card
Total
Allowance for lending
-
related co
m
mitments
Beginning balance at January 1,
$
9
27
$
12
$
—
$
939
Cumulative effect of change in accounting principles
(a)
(18) — —
(18
)
Provision for lending
-
related commi
t
ments:
Excluding accounting conformity
(a)
(177) (6) —
(183
)
Accounting conformity
(
b
)
— — —
—
Total provision for lending
-
related commitments
(177)
(6)
—
(183
)
Acquired allowance resulting from Washington Mutual transa
c
tion
—
—
—
—
Other
(c)
(21) — — (
21
)
Ending balance at December 31
$
711
$
6
$
—
$
717
Allowance for lending-related commitments by impairment
methodology
Asset
-
specific
$
180
$
—
$
—
$
180
Formula
-
based
531
6
—
537
Total allowance for lending
-
related commitments
$
711
$
6
$
—
$
717
Lending-related commitments by impairment methodology
Asset
-
specific
$
1,005
$
—
$
—
$
1,005
Formula
-
based
345,
074
61,534
547,227
953,835
Total lending
-
related commitments
$
346,079
$
6
1
,534
$
547,227
$
954,840
Impaired collateral-dependent loans
Net charge
-
o
ffs
$
269
$
3
04
$
—
$
5
73
Loans measured at fair value of collateral less cost to sell
806
890
—
1,696
(a) Effective January 1, 2010, the Firm adopted accounting guidance related to VIEs. Upon adoption of the guidance, the Firm consolidated its Firm-sponsored credit card
securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result, $7.4
billion, $14 million and $127 million, respectively, of allowance for loan losses were recorded on-balance sheet with the consolidation of these entities. For further
discussion, see Note 16 on pages 244–259 of this Annual Report.
(b) Represents adjustments to the provision for credit losses recognized in Corporate/Private Equity related to the Washington Mutual transaction in 2008.
(c) The 2009 amount predominantly represents a reclassification related to the issuance and retention of securities from the Chase Issuance Trust. For further information,
see Note 16 on pages 244–259 of this Annual Report. The 2008 amount predominantly represents a transfer of allowance between Corporate/Private Equity and
Credit card.
(d) Relates to risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a troubled debt restructuring.
(e) At December 31, 2010, 2009 and 2008 the asset-specific consumer excluding card allowance for loan losses included troubled debt restructuring reserves of $985
million, $754 million and $258 million respectively. The asset-specific credit card allowance for loan losses is related to loans modified in troubled debt restructurings.
(f) At December 31, 2010, the Firm’s allowance for loan losses on all impaired credit card loans was reclassified to the asset-specific allowance. This reclassification had
no incremental impact on the Firm’s allowance for loan losses. Prior periods have been revised to reflect the current presentation.
.