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

The Main Accounting Principles - Essay ExampleThis paper willing shed light upon how JP Morgan Chase has modified their accounting principles in the past and what impact has the same had on their growth. An Analysis of JP Morgan Chase Business environment is systematically changing, some changes bring unprecedented challenges and these challenges should be met in order to consistently keep doing well. The likes of AIG, Lehmann Brothers could not sustain during the period of recession and as an inevitable allow 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 daylight 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 intromission is without a doubt JP Morgan Chase, it has its presence in well over 60 countries. They argon the leaders in in vestment banking, wealth management and a innkeeper of other services. The cock-a-hoopgest change that ever took shoot for in the history of the financial institutions was the merger with confide One. This change primarily took place because the other banks like the Bank of America 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 declaration of this merger was made on 14 January 2004. The Wall Street 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 billion over three yearsand it was planned to eliminate as many as 10,000 people. This again goes to show how desperate even the biggest financial institutions were at the time of recession. Merger s 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 company will make up for that cost by holding the shares in the $39-$40 range, about where they were before the fortune 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 tribute J.P. Morgan will pay. Such a move 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 humongous $48 billio n. 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 nonetheless came down and the investors lost a lot 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 sum of $2 billion. This sum was paid to the different shareholders who had lost a lot of mon