JP Morgan Chase 2010 Annual Report Download - page 254

Notes to consolidated financial statements
254 JPMorgan Chase & Co./2010 Annual Report
Consolidated VIE assets and liabilities
The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm as of December 31, 2010
and 2009.
Assets Liabilities
December 31, 2010
(in billions)
Trading assets –
debt and equity
instruments Loans Other(a)
Total
assets(b)
Beneficial
interests in
VIE assets(c) Other(d) Total liabilities
VIE program type
Firm-sponsored credit card trusts $ — $ 67.2 $ 1.3 $ 68.5 $ 44.3 $ — $ 44.3
Firm-administered multi-seller conduits — 21.1 0.6 21.7 21.6 0.1 21.7
Mortgage securitization entities 1.8 2.9 — 4.7 2.4 1.6 4.0
Other 8.0 4.4 1.6 14.0 9.3 0.3 9.6
Total $ 9.8 $ 95.6 $ 3.5 $ 108.9 $ 77.6 $ 2.0 $ 79.6
Assets Liabilities
December 31, 2009
(in billions)
Trading assets –
debt and equity
instruments Loans Other(a)
Total
assets(b)
Beneficial
interests in
VIE assets(c) Other(d) Total liabilities
VIE program type
Firm-sponsored credit card trusts
(
e
)
$ — $ 6.1 $ 0.8 $ 6.9 $ 3.9 $ — $ 3.9
Firm-administered multi-seller conduits — 2.2 2.9 5.1 4.8 — 4.8
Mortgage securitization entities — — — — — — —
Other 6.4 4.7 1.3 12.4 6.5 2.2 8.7
Total $ 6.4 $ 13.0 $ 5.0 $ 24.4 $ 15.2 $ 2.2 $ 7.4
(a) Included assets classified as cash, resale agreements, derivative receivables, available-for-sale, and other assets within the Consolidated Balance Sheets.
(b) The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The difference between total assets and total
liabilities recognized for consolidated VIEs represents the Firm’s interest in the consolidated VIEs for each program type.
(c) The interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated Balance Sheets titled, “Beneficial
interests issued by consolidated variable interest entities.” The holders of these beneficial interests do not have recourse to the general credit of JPMorgan Chase.
Included in beneficial interests in VIE assets are long-term beneficial interests of $52.6 billion and $10.4 billion at December 31, 2010 and 2009, respectively. The
maturities of the long-term beneficial interests as of December 31, 2010, were as follows: $13.9 billion under one year, $29.0 billion between one and five years, and
$9.7 billion over five years.
(d) Included liabilities predominately classified as other liabilities as of December 31, 2010, and predominately classified as other liabilities and other borrowed funds as
of December 31, 2009.
(e) Includes the receivables and related liabilities of the WMMT. For further discussion, see page 246 of this Note.
Supplemental information on loan securitizations
For loan securitizations in which the Firm is not required to consoli-
date the trust, the Firm records the transfer of the loan receivable
to the trust as a sale when the accounting criteria for a sale are
met. Those criteria are: (1) the transferred financial assets are
legally isolated from the Firm’s creditors; (2) the transferee or
beneficial interest holder can pledge or exchange the transferred
financial assets; and (3) the Firm does not maintain effective control
over the transferred financial assets (e.g., the Firm cannot repur-
chase the transferred assets before their maturity and it does not
have the ability to unilaterally cause the holder to return the trans-
ferred assets).
For loan securitizations accounted for as a sale, the Firm recognizes
a gain or loss based on the difference between the value of pro-
ceeds received (including cash, beneficial interests, or servicing
assets received) and the carrying value of the assets sold. Gains and
losses on securitizations are reported in noninterest revenue. The
value of the proceeds received is determined under the Firm’s
valuation policies described in Note 3 on pages 170–187 of this
Annual Report.