Morgan Stanley 2009 Annual Report Download - page 221

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Company adjusts unrecognized tax benefits only when more information is available or when an event occurs
necessitating a change. The Company believes that the resolution of tax matters will not have a material effect on
the consolidated statements of financial condition of the Company, although a resolution could have a material
impact on the Company’s consolidated statements of income for a particular future period and on the Company’s
effective income tax rate for any period in which such resolution occurs.
It is reasonably possible that significant changes in the gross balance of unrecognized tax benefits may occur
within the next twelve months. At this time, however, it is not possible to reasonably estimate the expected
change to the total amount of unrecognized tax benefits and impact on the effective tax rate over the next twelve
months.
The following are the major tax jurisdictions in which the Company and its affiliates operate and the earliest tax
year subject to examination:
Jurisdiction Tax Year
United States ........................................................................ 1999
New York State and City .............................................................. 2002
Hong Kong ......................................................................... 2002
U.K. .............................................................................. 2004
Japan .............................................................................. 2004
21. Segment and Geographic Information.
The Company structures its segments primarily based upon the nature of the financial products and services
provided to customers and the Company’s management organization. The Company provides a wide range of
financial products and services to its customers in each of its business segments: Institutional Securities, Global
Wealth Management Group and Asset Management. For further discussion of the Company’s business segments,
see Note 1.
Revenues and expenses directly associated with each respective segment are included in determining its
operating results. Other revenues and expenses that are not directly attributable to a particular segment are
allocated based upon the Company’s allocation methodologies, generally based on each segment’s respective net
revenues, non-interest expenses or other relevant measures.
As a result of treating certain intersegment transactions as transactions with external parties, the Company
includes an Intersegment Eliminations category to reconcile the business segment results to the Company’s
consolidated results. Income before taxes in Intersegment Eliminations primarily represents the effect of timing
differences associated with the revenue and expense recognition of commissions paid by the Asset Management
business segment to the Global Wealth Management Group business segment associated with sales of certain
products and the related compensation costs paid to the Global Wealth Management Group business segment’s
global representatives. Intersegment eliminations also reflect the effect of fees paid by the Institutional Securities
business segment to the Global Wealth Management Group business segment related to the bank deposit
program.
216