JP Morgan Chase 2008 Annual Report Download - page 203

JPMorgan Chase & Co./ 2008 Annual Report 201
Note 19 – Premises and equipment
Premises and equipment, including leasehold improvements, are
carried at cost less accumulated depreciation and amortization.
JPMorgan Chase computes depreciation using the straight-line
method over the estimated useful life of an asset. For leasehold
improvements, the Firm uses the straight-line method computed over
the lesser of the remaining term of the leased facility or the estimat-
ed useful life of the leased asset. JPMorgan Chase has recorded
immaterial asset retirement obligations related to asbestos remedia-
tion under SFAS 143 and FIN 47 in those cases where it has suffi-
cient information to estimate the obligations’ fair value.
JPMorgan Chase capitalizes certain costs associated with the acquisi-
tion or development of internal-use software under SOP 98-1. Once
the software is ready for its intended use, these costs are amortized
on a straight-line basis over the software’s expected useful life and
reviewed for impairment on an ongoing basis.
The components of credit card relationships, core deposits and other intangible assets were as follows.
2008 2007
Net Net
Gross Accumulated carrying Gross Accumulated carrying
December 31, (in millions) amount amortization value amount amortization value
Purchased credit card relationships $ 5,765 $4,116 $ 1,649 $ 5,794 $ 3,491 $ 2,303
All other intangibles:
Other credit card-related intangibles $ 852 $ 109 $ 743 $ 422 $ 76 $ 346
Core deposit intangibles 4,280 2,683 1,597 4,281 2,214 2,067
Other intangibles 2,376 784(a) 1,592 2,026 643(a) 1,383
(a) Includes amortization expense related to servicing assets on securitized automobile loans, which is recorded in lending & deposit-related fees, of $5 million and $9 million for the years
ended December 31, 2008 and 2007, respectively.
Amortization expense
The following table presents amortization expense related to credit card relationships, core deposits and all other intangible assets.
Year ended December 31, (in millions) 2008 2007 2006
Purchased credit card relationships $ 625 $ 710 $ 731
All other intangibles:
Other credit card-related intangibles 33 11 6
Core deposit intangibles 469 554 568
Other intangibles 136 119 123(a)
Total amortization expense $1,263 $ 1,394 $ 1,428
(a) Amortization expense related to the aforementioned selected corporate trust businesses were reported in income from discontinued operations for 2006.
Future amortization expense
The following table presents estimated future amortization expense related to credit card relationships, core deposits and all other intangible
assets at December 31, 2008.
Other credit
Purchased credit card-related Core deposit All other
Year ended December 31, (in millions) card relationships intangibles intangibles intangible assets Total
2009 $ 419 $ 93 $ 390 $ 123 $ 1,025
2010 350 98 329 106 883
2011 287 97 285 96 765
2012 249 98 239 93 679
2013 210 97 196 90 593