The Main Accounting Principles Essay Example | Topics and Well Written Essays - 1750 words

The Main Accounting Principles - Essay ExampleThis penning will shed light upon how JP Morgan label has modified their accounting principles in the past and what impact has the aforementioned(prenominal) had on their fermentth. An Analysis of JP Morgan Chase Business environment is consistently changing, some varys bring unprecedented ch eachenges and these challenges should be met in order to consistently keep doing well. The similars of AIG, Lehmann Brothers could not sustain during the period of recession and as an fatal result of which suffered hefty losses. This paper will expansively present the accounting policies and the changes adapted by JP Morgan Chase in order to successfully face the modern day challenges. A complete analysis of the major changes incorporated by JP Morgan chase will be expansively presented in this paper. The oldest financial services in the world is without a doubt JP Morgan Chase, it has its presence in well over 60 countries. They are the lea dership in investment banking, wealth management and a host of other services. The biggest change that ever took confide in the history of the financial institutions was the merger with buzzword One. This change primarily took ordain because the other banks like the Bank of the States were almost ready to merge with other big banks like FleetBoston. This merger took place because the financial institutions came under increasing pressure during the time of recession. The announcement of this merger was made on 14 January 2004. The Wall driveway reacted very positively because of this merger and the NASDAQ witnessed growth soon after the merger took place. This change took place because the two financial institutions wanted to downsize and cut the deadwood out. The aim was to save about $2.2 one million million over three yearsand it was planned to eliminate as many as 10,000 people. This again goes to make how desperate even the biggest financial institutions were at the time o f recession. Mergers and acquisitions were very common and these overtures were the initial signs which showed that almost all the big financial institutions were panicking. Volatile corporate banking was the major factor on which JP Morgan primarily functioned. Wall Street analysts generally praised the merger, and investors climbed on board. Typically, the shares of the acquirer fall, reflecting the cost of the acquisition. In this case, investors are signaling they believe the combined familiarity will make up for that cost by holding the shares in the $39-$40 range, about where they were out front the deal was announced. J.P. Morgan has been on a roll, with its shares up about 74% in the past 12 months. Bank One shares jumped about 15% when the deal was announced, matching the premium J.P. Morgan will pay. Such a fall is typical in an acquisition. (JP Morgan Chase) The investors looked less enthusiastic with the deal between Bank of America and Fleet-Boston. This deal was for a whopping $48 billion. The shares of Fleet-Boston were driven up as a result of this deal because Bank of America offered 40% premium in this deal. The shares of Bank of America however came down and the investors lost a potentiometer of money consequently. Big mergers take place because both the companies involved in the merger want to grow at a tremendous pace but this merger was not very useful for both the financial institutions. The collapse of WORLDCOM in the year 2005 signaled trouble for JP Morgan chase, the institution had to pay a whopping magnetic core of $2 billion. This sum was paid to the different shareholders who had lost a lot of mon