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Spotlight Training Project Reviews Construction in Process Fixed Assets

Spotlight Training Project Reviews Construction in Process Fixed Assets. Offered by: Training & Development Team Presenters: Lisa Sockwell & Georgi Stavrev Real Estate Project Accounting December 6, 2010. Project Reviews. High level review to ensure accuracy

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Spotlight Training Project Reviews Construction in Process Fixed Assets

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  1. Spotlight TrainingProject ReviewsConstruction in Process Fixed Assets Offered by: Training & Development Team Presenters: Lisa Sockwell & Georgi Stavrev Real Estate Project Accounting December 6, 2010

  2. Project Reviews High level review to ensure accuracy • All architect & GC invoices in detail • Remainder are quantified per accounting treatment • PA settlement 80%, we review 79% • Precursor to fixed asset settlement Log updated weekly with materiality & assignment Macro utilized to format 5 queries • General Project Overview • Owned / Leased, project scope • BCC / CCC, budget set up • Reconcile PTS to SAP, Asset Balances – 7 excel tabs total • Proposed journal entries – if closed, 10k threshold • Electronic and hardcopy file saved for Audit

  3. Project Reviews 383 Madison-Renovations to Move SLF team Project 100071789

  4. Project Reviews 383 Madison-Renovations to Move SLF team Project 100071789

  5. Construction in Process (CIP) SAP Yes Criteria for budget set up • Minimum 50k threshold, multiple asset classes required • Milestone dates monitored & reported to Team Mumbai • Asset settlement auto & manual based on initiative Macro utilized, formats 6 queries, Phase 1 • WIP report has 44 columns, 4369 lines of data • Asset Analysis – provides a “numbers only” report to Caroline Pawlak • Status comments – obtained from additional reports or PM Presented to Keith Jordan monthly, Phase 2 • Final report represents ALL financial data in 15 tabs • LOB breakdown, WAMU initiative, & 5 project summaries • 8832 projects, total assets posted $2.24 billion

  6. Construction in Process (CIP)

  7. Construction in Process (CIP)

  8. Fixed Assets Fixed assets, a.k.a. Property, Plant, & Equipment • items, which businesses use for extended period of time • provide benefit for more than one operating cycle (one year or longer) • land, buildings, motor vehicles, furniture, office equipment etc Accounting for Fixed Assets • record on books using historical cost (purchase price) • depreciate over its useful life - 5, 7, 15, 20 etc. years • book depreciation differs from tax depreciation 10 yr vs. 39 yr for Building Interior • effect on financial statements and ratios

  9. Fixed Assets Leased vs. Owned properties • Properties can be Leased or Owned • Owned properties • record assets on books for purchase price • depreciate over the asset’s normal useful life • Leases can be Capital or Operating • Operating lease properties • do not record assets on books • similar to rental contract • Capital lease properties and leasehold improvements • depreciate over the remaining lease life • asset’s normal useful life

  10. Fixed Assets JPMorgan Chase Fixed Asset • Grouped in asset classes - #3090 Signage, #3185 Aircraft • Capitalization thresholds • $1K for Furniture, Bank equipment, Signage • $25K for Roofing, HVAC, Paving • $50K for Building Interior & Structure • Fixed assets on Financial Statements • 2009 Annual Filings: http://files.shareholder.com/downloads/ONE/1084506287x0x362439/ a51db960-bda2-4e30-aacd-3c761b81ba75/2009_AR.pdf • Premises and Equipment (page 147 of Balance Sheet) • Depreciation Expense (page 146 of Income Statement)

  11. Any Questions…?

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