Summary
JPMorgan Chase & Co. (JPM) filed this 8-K to announce a revision in how Earnings Per Share (EPS) is presented in its 2008 Annual Report (10-K). This change is due to the adoption of a new accounting standard, FASB Staff Position EITF 03-6-1, which clarifies that certain unvested stock-based compensation awards with nonforfeitable dividend rights are now considered 'participating securities'. Consequently, these awards must be included in the EPS calculation using the two-class method. While this revision affects the reported EPS figures for historical periods, it is important to note that it did not impact JPMorgan Chase's net income, financial position, or regulatory capital. The company is retroactively applying this change effective January 1, 2009, and the revised EPS data will be reflected in future filings. Investors should be aware of this change in EPS presentation to ensure accurate comparison of historical and future financial performance metrics.
Key Highlights
- 1JPMorgan Chase is revising its previously reported EPS figures in its 2008 10-K.
- 2The revision is driven by the adoption of FASB Staff Position EITF 03-6-1 concerning the accounting for share-based payments.
- 3Unvested stock-based awards with dividend rights are now classified as 'participating securities'.
- 4These participating securities will be included in the two-class method for calculating EPS.
- 5The adoption of this standard did not affect JPM's net income, financial position, or regulatory capital.
- 6The change is applied retrospectively for periods beginning January 1, 2009, and will be reflected in future filings.
- 7Basic and Diluted EPS for years 2004-2008 have been restated downwards under both 'as reported' and 'as revised' categories.