JP Morgan Chase 2010 Annual Report Download - page 263

JPMorgan Chase & Co./2010 Annual Report
263
Amortization expense
Intangible assets of approximately $600 million, consisting primarily of asset management advisory contracts, were determined to have an indefinite life
and are not amortized.
The following table presents amortization expense related to credit card relationships, core deposits and all other intangible assets.
Year ended December 31, (in millions) 2010 2009 2008
Purchased credit card relationships $ 355 $ 421 $ 625
All other intangibles:
Other credit card–related intangibles 111 94 33
Core deposit intangibles 328 390 469
Other intangibles 142 145 136
Total amortization expense $ 936 $ 1,050 $ 1,263
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, 2010.
Year ended December 31, (in millions)
Purchased credit
card relationships
Other credit
card-related intangibles
C
ore deposit
intangibles
All other
intangible assets Total
2011
$
294
$
103
$
284
$
116
$
797
2012
254
106
240
111
711
2013
213
103
195
108
619
2014
109
102
10
0
94
40
5
201
5
23
95
25
76
219
Impairment testing
The Firm’s intangible assets are tested for impairment if events or
changes in circumstances indicate that the asset might be impaired,
and, for intangible assets with indefinite lives, on an annual basis.
The impairment test for a finite-lived intangible asset compares the
undiscounted cash flows associated with the use or disposition of
the intangible asset to its carrying value. If the sum of the undis-
counted cash flows exceeds its carrying value, then no impairment
charge is recorded. If the sum of the undiscounted cash flows is less
than its carrying value, then an impairment charge is recognized to
the extent the carrying amount of the asset exceeds its fair value.
The impairment test for indefinite-lived intangible assets compares
the fair value of the intangible asset to its carrying amount. If the
carrying value exceeds the fair value, then an impairment charge is
recognized for the difference.
Note 18 – 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
estimated useful life of the leased asset. JPMorgan Chase has
recorded immaterial asset retirement obligations related to asbes-
tos remediation in those cases where it has sufficient information to
estimate the obligations’ fair value.
JPMorgan Chase capitalizes certain costs associated with the
acquisition or development of internal-use software. 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.
Note 19 – Deposits
At December 31, 2010 and 2009, noninterest-bearing and interest-
bearing deposits were as follows.
December 31, (in millions)
2010
2009
U.S. offices
Noninterest-bearing $ 228,555 $ 204,003
Interest-bearing:
Demand
(a)
33,368 15,964
Savings
(b)
334,632 297,949
Time (included $2,733 and $1,463
at fair value at December 31,
2010 and 2009, respectively)(c) 87,237 125,191
Total interest-bearing deposits 455,237 439,104
Total deposits in U.S. offices 683,792 643,107
Non-U.S. offices
Noninterest-bearing 10,917 8,082
Interest-bearing:
Demand 174,417 186,885
Savings 607 661
Time (included $1,636 and $2,992
at fair value at December 31,
2010 and 2009, respectively)(c) 60,636 99,632
Total interest-bearing deposits 235,660 287,178
Total deposits in non-U.S. offices 246,577 295,260
Total deposits $ 930,369 $ 938,367
(a) 2010 and 2009 includes Negotiable Order of Withdrawal (“NOW”)
accounts. 2010 includes certain trust accounts.
(b) Includes Money Market Deposit Accounts (“MMDAs”).
(c) See Note 4 on pages 187–189 of this Annual Report for further information
on structured notes classified as deposits for which the fair value option has
been elected.