Monday, January 27, 2020

Measurement of Lying and Standing Blood Pressure

Measurement of Lying and Standing Blood Pressure Jayne Flood Introduction This report aims to discuss the best practice on the measurement of a lying and standing blood pressure. In addition to this; formulate a search strategy to provide the best evidence based practice. Doctor David Sackett defines evidence based practice as; â€Å"The conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients† (Sackett et al. 2000). This in Laymen’s terms means; to use all available resources of information to form an opinion or judgement on how to provide the best possible care to the patient. Some people suffer from a condition called Presyncope, this can cause them to feel lightheaded or unsteady on their feet when rising from a lying or sitting position; this condition is often associated with the older generation and can cause them to fall. They feel this way because the brain or cerebral cortex does not receive enough oxygen, due to a lack of circulation when they stand up. This can th en cause them to fall over or pass out. This condition is also known as Hypotension or Orthostatic Blood Pressure. The best way to diagnose or determine if the patient is suffering from this condition, is too perform a procedure called a lying and standing blood pressure. This usually requires the Health Care Professional to take the patient’s blood pressure while they are lying down, then to record the blood pressure immediately on standing and then again when they have been standing for two minutes; to determine if the patient has a significant drop in their blood pressure in a standing position. Formulating a search strategy for the three resources The three resources for this report that will be searched and discussed are books, journals and the internet. The key words used in this report will be; Lying and Standing Blood Pressure, Orthostatic Blood Pressure, Hypotension and measurement. The main sentence used will be measurement of orthostatic blood pressure. Before beginning the search it can be helpful to design a mind map, spider graph or brainstorm, to help generate any new key words that can be used in the search. (Cottrell, 2003). The main focus for this report will be on Measurement of Orthostatic blood pressure. Internet A good search resource is the internet because it is fast and instant. Turn on the computer and connect to www.google.com; then in the search bar, type in the words lying and standing blood pressure. This yielded nine hundred and forty two thousand search results in fifty four seconds. The word measurement was used to try and narrow the search results down. Type in the words measurement of orthostatic blood pressure, this narrowed the search results down to two hundred and twenty four thousand. Applying Boolean logic to the search bar, can help to narrow the results further; simply add the words â€Å"AND† or â€Å"OR†. George Boole was a mathematician who came up with the idea to add either of these words to the keywords to narrow down a search, (Freeman and Thompson, 2009). The word AND added to the keywords lying and standing blood pressure, will produce results that include both the keywords lying and standing. Adding the word OR will also produce results that inclu de the keywords lying and standing, this severely increase the search results. The word NOT can also be added to the key words, which will narrow the results considerably as this searches for only one of the key words and rules out the other. (Freeman and Thompson, 2009). Using Boolean logic did not help in this particular search. Scrolling through the Google search results, revealed that a lot of the websites were generated abroad. This can be reduced down by clicking on the search tool button, then clicking on country United Kingdom only, this reduced the results down by half. To try and reduce the results further, type google scholar in the Google search bar, this will access google scholar (www.scholar.google.co.uk.) Type in measurement of orthostatic blood pressure in the search bar, this produced a search result of forty five thousand meaning it was considerably less. By clicking on advanced search and inputting the dates to no more than five years, reduces the results down to twenty in seven seconds. The downside to advance search on google scholar, is that there is no discrimination against foreign websites. When searching the internet, it is important to remember the three ‘W’s.’ Who; What and When. Who produced the website and can they be trusted; for instance; is it written by a drug company who are trying to sell their products. Where the website is from; is it British or from abroad? Ideally healthcare professionals should be using information from their own country in their assignments. And finally, when was the website last updated? A lot of websites are rarely updated, so it is important to look at when the website was created and updated. (Freeman and Thompson, 2009). Journals Another great resource that healthcare professionals can research are journals or e-journals. Journals are current and up to date. Written by qualified professionals and peer reviewed, they also contain many volumes. The downside to using journals is that they can be very costly, difficult to store and hard to search (O’Dochartaigh, 2002). The university has a library that can be accessed day or night, or you can use their library website or the university website. Sign in to the library account and type in measurement of orthostatic blood pressure. This produced a hundred and seventy six results, this includes journals and books. You can refine the search results further by going to the advanced search section, and clicking on the relevant boxes that may be needed to do this, for example, in this case all that was needed was to refine the search was the date which yielded only fifty two results. Also underneath the refine results section is a list of the authors, the name of the journals and the databases they were found in. This information is helpful if the name of certain journals is not known; the same with databases. By clicking on the more options part of these lists, you can eliminate or include whichever journals or databases required; for example, in this case all articles from abroad were eliminated, reducing the search results down to forty nine. If the name of the journal is known, then the library website has an e-journals section; click on the box that says â€Å"find e journals.† This will bring up a separate box with the alphabet, click on the relevant letter or type in the name of the journal in the search bar. For example the nursing times was searched. This then opens up a new link box, click on the nursing times title; this will open up a separate box where the year, volume, issue and page numbers can be inserted to access the particular e-journal required. For the purpose of this report, it is known that the particular nursin g times journal was printed in the year two thousand and seven (2007), the volume number is one hundred and three (103), the issue number is twenty (20), and the page starts on number twenty four (24). These numbers when inputted into the boxes, will take you directly to the e-journal required. The hospital library also has its own journal and e-journals databases. A lot of the e-journals are accessed via an Athens database account, this is an Access Management System developed by Eduserv; a safe service provider that allows access to all electronic resources the hospital or university are subscribed to. Access to Athens can be done through the university or the hospital, you can register an account with them at no cost to the user, as long as you are a healthcare professional or student. Databases are a systematic collection of data that can be accessed for information, either through the World Wide Web, work or university library. Once again, it does help if you know the name of a ny databases. On the university webpage there is a box that says â€Å"databases†. Clicking on this link will open up a separate box to which you can type in the name of the database required. For the purpose of this report; Cumulative Index to Nursing and Allied Health Literature (Cinahl) will be used. Type Cinahl into the search bar, this generates one search result; double click on the title and this will take you directly to the database. In the search bar type in measurement of orthostatic blood pressure, this will then open up a separate link with new keywords; tick the boxes of the keywords to be used. For example, in this case the keywords are measurement of orthostatic blood pressure. Click the search database button and this yielded ten results. To try and find other articles, type in lying and standing blood pressure in the top search bar; in the search bar underneath, type the word â€Å"AND† next to it and type in the word measurement this yielded no resul ts. When searching journals, it is vital to ensure the writers are British; what their qualifications are; and are they qualified healthcare professionals. Checking the date of the journal may be vital, as anything older than five years can be considered out of date. The same should be taken under consideration when searching databases. Books Books are another great search tool for healthcare professionals; they can be easier than journals and the internet to search for, and more reliable than the internet. Books give the reader a summary of what is written in the book, by reading the blurb on the back. Books also contain a contents and index page; this allows the reader to go to a specific page or chapter instead of having to read the whole book; unlike journals. Unfortunately books are expensive and take up a lot of storage space. There are four options available when searching for books: The public library, the hospital library, the university library and google books (www.books.google.co.uk). For the purpose of this report the university library will be used. The university provide tuition on how to search and use the library website within a month of starting the course. The university library informs the researcher what books are available, how many books there are, where they can be located in the library and on wh ich campus, how long the book can be borrowed for and whether the book is available online as an e-book. Searching for measurement of orthostatic blood pressure; or lying and standing blood pressure yielded no results for books; the search was then changed to hypotension which yielded one result. To try and yield a few more results, the title was changed to orthostatic blood pressure, this only yielded journals. Blood pressure was then typed into the search bar, this produced over three hundred and nineteen thousand results; they included journals, books and full text online. To reduce this down; there is the option to advance the search; by clicking on the â€Å"available in the library† option reduced the results down to fifteen books, ruling out all the journals etc. Choose an appropriate book and look at the options available underneath the title and description of the book. The location option tells you which campus the book is located on and therefore where it can be lo cated in the library. This can also inform the researcher if the book is available to borrow on the day, or when it becomes available to borrow; it can also allow the user to hold the book; meaning the previous borrower cannot renew the book. Clicking on the details option gives the user the author(s), the subject, identifier and a brief description of the book; this can allow the user to choose or eliminate the book quickly and easily. Clicking on the virtual browse button, allows the user to view other books that are along the same shelves as the book the user is looking at. To the left of the library webpage as mentioned earlier; is the option to advance search. Above the words available in the library is â€Å"full text online†; clicking on this option gives the user access to the e-books online, allowing them to download the book for a maximum period of two days or to read the book online. Once the user has chosen the books they require, it is just a simple matter of goi ng to the library and borrowing the books. It is important when looking at books for the user to take into account the date, who wrote the book and whether it contains the relevant information required. Discussion Formulating a search strategy requires planning, organisation, time and practice. Journals, internet and books are essential tools needed to improve the quality of information assembled from the research. Therefore it is essential to check the credentials of the person writing the information, where the information is from and when it was written or compiled. When searching the internet it became apparent that the websites accessed only spoke about the signs and symptoms of orthostatic blood pressure and not about how to measure the blood pressure only three websites produced the results required, one produced a useable tool, the other gave a step by step explanation on how to do a lying a standing blood pressure, but no other information. The last website explained the correct procedure, explained the signs and symptoms of orthostatic blood pressure, was written by a qualified healthcare personnel, however the webpage did not give a date for when it was updated or due to be reviewed only that it was produced in nineteen ninety six. Searching the hospital and university libraries produced one journal which gave the correct procedure on how to measure a lying and standing blood pressure, this was found in the Nursing times but was out of date by eighteen years. Searching through the university library yielded several books on blood pressure, all with a section on the cause of orthostatic blood pressure, but nothing on the correct measurement of lying and standing blood pressure. The hospital library produced one book with the correct procedure for measuring orthostatic blood pressure. Formulating the search took up an amazing amount of time and resources and has proved to be illusive and inconclusive. In order to find the correct procedure for measuring orthostatic blood pressure further research will be required. With more practice on the use of keywords will hopefully produce the required results. Formulating this search strategy and report has proven how easy it is to get bogged down with information. Using Boolean logic is extremely useful in most search criteria’s but did not work for this particular search. Adding speech marks to measurement of orthostatic blood pressure also did not help, the search tended to focus on the words blood pressure, how to measure blood pressure or just orthostatic blood pressure. This has proven that the keywords should also include words such as â€Å"how to† or â€Å"correct†. Conclusion This report has shown how the use of a spider graph or mind map, is an extremely useful way of beginning the formulation of a search strategy (Cottrell, 2003). It has also demonstrated that using Boolean logic can be an effective tool when searching for information (Freeman and Thompson, 2009). The use of evidence based practice or medicine has also been discussed by discussing what was good and bad about the information and the indicators used to determine this, such as the three W’s, who, when and where to whittle the information down. The internet has proven to be the most interesting and time consuming because anything can be typed in the search bar and it will come up with a vast amount of results. Using different techniques to try and reduce the information down was time consuming. Using the hospital and university was more reliable to find books and journals was less time consuming. They also have librarians that are helpful in times of crisis. Books and journals were t he most reliable sources of information because they are generally written by experts in the field being researched. Completing this report has proven to be a useful way of improving knowledge, skills and an effective learning curve. Learning that evidence based practice is based on the best available evidence. Ensuring any advice given is evidence based especially if recommending healthcare products or services and ensuring that any complementary or alternative therapies are in the best interests of the person in the healthcare professionals care (NMC, 2008). Completing this report has acknowledge that less time is required on the structure of the report and more time must be spent on the research. References Aveyard, H. (2014) Doing a literature review in health and social care. A Practical guide. 3rd edition. Berkshire: Open University Press. www.cdc.gov/homeandrecreationalsafety//measuring_orthostatic_bp[accessed 20th November 2014] http://www.cdc.gov/injury/STEADI [accessed 20th November 2014] Cottrell, S. (2013) The study skills handbook. 4th edition. Basingstoke: Palgrave Macmillan. Dougherty,L. Lister, S. (2011) The Royal Marsden Hospital Manual of Clinical Nursing Procedures. 8th edition. Oxford. U.K: Wiley, John Sons, Incorporated. Freeman, B. Thompson, D. (2009) Fundamental aspects of finding and using information. A guide for students of nursing and health. London Quay Books. Hek, G. Et al (1996) Making sense of research – an introduction for nurses. London: Cassell. O’Dochartaigh, N. (2002) The internet research handbook. London. Sage Publications. Pear, R. Shields, G. (2013) Cite them right. The essential referencing guide. 9th edition. Basingstoke: Palgrave Macmillan. Sackett, D.L. Et al (2000) Evidence-based medicine. How to practice and teach EBM. London. Churchill Livingston. http://www.medscape.com/viewarticle/474822_2 [accessed 20th November 2014]

Saturday, January 18, 2020

Financial Analysis of Bank of America

Financial Statement Analysis of Bank of America Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of Bank of America1 1. 1Balance sheet1 1. 2Income statement2 1. 3Regulatory capital ratios2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1Bank of America3 1. 5. 2JP Morgan Chase3 1. 5. 3Citi Group3 1. 6Netting Financial Instruments3 1. 6. 1Bank of America4 1. 6. 2Comparable banks4 1. 6. 3Analysis of the impact4 2Fair Value Accounting for Financial Instruments4 2. Fair value accounting4 Table 6 Summary of the Fair Value Income5 2. 2Opinions about fair value accounting5 3Interest Rate Risk and Net Interest Earnings6 3. 1Net interest margin6 3. 2Interest rate risk7 4Credit Risk and Losses7 4. 1Main loss reserve adequacy ratios8 4. 2Policy to designate past due loans as non-performing8 4. 3Adequacy of the bank’s allowance for loan losses8 4. 4Disclosure policies relating to loans8 5Appendix9 * Part 1 Financial Statements of Bank of America . 1. 1 Balance sheetBank of America’s balance sheet has total assets of $2,129,046 million in 2011, which is less than last year’s $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41. 92% of the total assets. The next largest asset was Available-For-Sale securities making up 12. 97% of total assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U. S. offices both interest bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was long-term debt at 19. % of total liabilities. In millions| 2011| % of total assets| 2010| % of total assets| % chg from 2010-2011| Total asset| 2,029,046 | 100. 00%| 2,264,909 | 100. 00%| -10. 41%| Loans and leases| 892,417 | 43. 98%| 898,555 | 39. 67%| -0. 68%| Available-for-sale| 276,151 | 13. 61%| 337,627 | 14. 91%| -18. 21%| Total liabilities| 1,898,945 | 93. 59%| 2,036,661 | 89. 92%| -6. 76%| Total deposits| 1,033,041 | 50. 91%| 1,010,430 | 44. 61%| 2. 24%| Deposits in U. S. offices| 957,042 | 47. 17%| 930,913 | 41. 10%| 2. 81%| Long-term debt| 372,265 | 18. 35%| 448,431 | 19. 80%| -16. 98%| Leverage ratio| 14. 0 | ? | 8. 92 | ? | 63. 58%| Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chase’s total deposits 54. 6% and long-term debt 22. 77% of total lia bilities, while Citi has deposits 51. 11% and long-term debt of 19. 09%. According to the deposits in U. S. offices, BOA focus more in U. S market and Citi focus more on market outside U. S. In millions| Bank of America| % of total assets| JP Morgan Chase| % of total assets| Citi Group| % of total assets| Total asset| 2,129,046 | 100. 00%| 2,265,792 | 100. 00%| 1,873,878 | 100. 00%| Loans and leases| 892,417 | 41. 92%| 696,111 | 30. 72%| 617,127 | 32. 93%| Available-for-sale| 276,151 | 12. 97%| 364,793 | 16. 10%| 293,413 | 15. 66%| ? | ? | ? | ? | ? | ? | ? |In millions| Bank of America| % of total liabilities| JP Morgan Chase| % of total liabilities| Citi Group| % of total liabilities| Total liabilities| 1,898,945 | 100. 00%| 2,082,219 | 100. 00%| 1,694,305 | 100. 00%| Total deposits| 1,033,041 | 54. 40%| 1,127,806 | 54. 16%| 865,936 | 51. 11%| Long-term debt| 372,265 | 19. 60%| 256,775 | 22. 77%| 3,235,050 | 190. 94%| Leverage ratio| 8. 25 | ? | 11. 34 | ? | 9. 44 | ? | | | | | | | | In millions| Bank of America| % of total deposits| JP Morgan Chase| % of total deposits| Citi Group| % of total deposits| Deposits in U. S. offices| 957,042 | 92. 64%| 851,534 | 75. 0%| 343,288 | 39. 64%| Table 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the event of a bank run, Bank of America will be in trouble due to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including cash and cash equivalents of $120,102 million, time deposits and other short-term investments of $26,004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it will still only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of America’s income statement is net income of $1,446 million, which increased compared to a net loss of 2,238 in 2010. Interest income was $66 ,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the net interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, decreased by 16. 8% from 2010. This is partly due to the big loss of mortgage banking income, decreasing from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line while having net interest income decrease slightly. Regulatory capital ratios 2011| Bank of America| JP Morgan Chase| Citi Group| To be well capitalized| Leverage ratio| 7. 53%| 6. 80%| 7. 19%| 5%| Tier 1 risk-based capital ratio| 12. 40%| 12. 30%| 13. 55%| 6%| Total risk-based| 16. 75%| 15. 40%| 16. 99%| 10%| Table 3 Regulatory Capital Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all three regulatory ratios–Tier 1 capital, risk-based capital and leverage.Ba nk of America slightly increased all of its ratios from 2010 to 2011. Its tier 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly important; however there are some issues with them. The ratios are backwards looking, so there could be a large amount of change since in the numbers. There are also lots of adjustments made by the company to the different numbers that make up the ratio that might not even make sense such as ignoring AFS losses. The current risk weighting is also ve ry simplistic currently and might not reflect the actual risk of the assets.One important thing to note is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be implemented by January 1, 2015. According to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of potential financial meltdowns, it should hold more and better quality capital, carry more liquid ssets, and limit leverage. ( , ) Investment portfolio The net unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognized in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed other than temporarily (OTT) i mpaired, so that amortized cost is the carrying value. Amortized cost is a highly limited valuation basis for risky securities. There was very little mention of reclassification in Bank of America’s 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning equity securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). Only credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 is $360 million, and portion of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in earnings on AFS debt securities in 2011, compared to $970 million on AFS debt and mark etable equity securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesn’t divide these amounts into credit-related portion and non-credit related portion. Based on the other two banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after adoption. Citi Group Citigroup also adopted the same rules above in first quarter of 2009. As a result of the FSP, Company’s Consolidated Statement of Income reflects the full impairment on debt securiti es that the Company intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis.As a result of the adoption of the FSP, Citigroup’s income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was decreased by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss component of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Netting Financial Instruments | Â  | Bank of America| JP Morgan Chase| Citi Group| IFRS(Before netting)| Total assets| 2,130,796| 3,976,317| 2,749,470| | Total debt| 1,900,695| 3,792,742| 2,564,671| | Total equity| 230,101| 183,575| 184,799| | Leverage ratio| 8. 26| 20. 66| 13. 88| GAAP(After netting)| Total assets| 2,129,046| 2,265,792| 1,873,878| | Total debt| 1,898,945| 2,082,219| 1,694,305| | Total equity| 230,101| 183,573| 179,573| | Leverage ratio| 8. 25| 11. 34| 9. 44| Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4—Derivatives, Bank of America had legally enforceable master netting agreement that would reduce both derivative assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash collateral was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldn’t affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross derivative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was insignificant compared to Bank of America’s total asset base (2,129,046 million, about 0. 08%). Th erefore, the leverage ratio would only increase slightly due to this change, from 8. 25 under GAAP to 8. 26 under IFRS. Comparable banks J. P. Morgan Chase’s gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chase’s total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a much higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Group’s netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against derivative liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of t he netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the presentation of netting financial instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a distinguished difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive picture of banks’ derivative instruments; however, it would overstate risk to some extent. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant metrics than the gross amounts. Naturally, this comes about from looking to the way that derivatives are traded under an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the replacement by a single net am ount. Secondly, another metric to measure derivative portfolios is volatility which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change before solvency is affected. Finally, as the third most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. Collateral amounts further reduce the risks and have to be taken into consideration for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting From table 5 and the three computation tables in Appendix, we can see that under Full Fair Value method, Bank of America’s net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi w ould experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions| Bank of America| JP Morgan Chase| Citi Group| Adjustments for assets and liabilities at HC on balance sheet| 6,127 | 1,140 | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| -4,819 | 633 | 2,190 | Total adjustment| 1,308 | 1,773 | 14,190 | Net income as per financial statements| 1,446 | 18,976 | 11,215 | Full fair value income with information available| 2,754 | 20,749 | 25,405 | * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as it had a significant unrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, su ch difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any specific events affecting the operations of the issuer, underlying assets that collateralize the debt security, other industry and macroeconomic conditions, and management’s intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses included in accumulated OCI. In 2011, the fair value of net ALM contracts decreased $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair value accounting Fair Value Accounting has many advantages and disadvantages as listed below. FVA advantages include the following: FVA depicts a clearer picture of the company’s financi al situation, as it provides an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers’ ability to manipulate the reported net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For Level 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the selective realization of cumulative unrealized gains and losses on positions, an activity referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typi cally is persistent for as long as firms hold positions, but becomes transitory when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include: The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A solution for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price may change back to the normal level. Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Manager s need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the drop in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and there’s no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair value for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any signif icant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk exposure and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, especially during financial crisis.Fair value accounting would further contribute to the deterioration in the value of a company’s financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under today’s economy. FVA provides better insight of the financial statements, in ddition to limiting the potential for manipulation. However, in my opinion, under today’s economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to: (1).There’s a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78% to 4. 18%. (2). Noninterest income declined from the previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warrant ies costs and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of America's income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in modeled prepayment expectations, and increased hedge ineffectiveness. (4). Bank of America’s declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such downward trend in net interest margin can be observed in other banks as well. The following table presents total interest-earning assets rate and total interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks experienced a decline in interest-earning assets rate over three years: 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year; 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8%; 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks’ declining net interest margin were higher deposit balances with lower loan yields. | Bank of America| JP Morgan Chase| Citi Group| | 2011| 2010| 2009| 2011| 2010| 2009| 2011| 2010| 2009| Total interest-earning assets rate| 3. 65%| 4. 02%| 4. 31%| 3. 51%| 3. 83%| 4. 04%| 4. 27%| 4. 55%| 4. 78%| Total interest-bearing liabilities| 1. 39%| 1. 39%| 1. 77%| 0. 86%| 0. 84%| 1. 02%| 1. 63%| 1. 61%| 1. 3%| Table 6 Net Interest Margin of Three Banks Interest rate risk BOA’s net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel shift in interest rate. 1% downward change in interest rate results in a bigger decrease in net interest income in 2011 than in 2010. However , according Chase’s 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward shift| 2011| 2010| BOA| ($2,122)| ($998)| JP Morgan Chase| NM| NM| Citi Group| NM| NM| Table 7 The Impact of 1% downward shift on Net Interest Income BOA’s net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upward parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase and smaller impact for Citi. 1% upward shift| 2011| 2010| Bank of America| $1,505 | $601 | JP Morgan Chase| $2,326 | $1,483 | Citi Group| $97 | ($105)| Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the bank’s allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Held-to maturity debt securities| 35,265 | 35,442 | 427 | 427 | 177 | – | 177 | Loans| 870,520 | 843,392 | 876,739 | 861,695 | (27,128)| (15,044)| (12,084)| Total assets| 905,785 | 878,834 | 877,166 | 862,122 | (26,951)| (15,044)| (11,907)| Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 1,033,041 | 1,033,248 | 1,010,430 | 1,010,460 | 207 | 30 | 177 | Long-term debt| 372,265 | 343,211 | 448,431 | 441,672 | (29,0 54)| (6,759)| (22,295)| Total liabilities| 1,405,306 | 1,376,459 | 1,458,861 | 1,452,132 | (28,847)| (6,729)| (22,118)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | 1,896 | (8,315)| 10,211 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? ? | 6,127 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? | Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | (4,270)| Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (549)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,308 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 1,446 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 2,754 | JP Morgan ChaseIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Loans| 696,100 | 695,800 | 660,700 | 663,500 | (300)| 2,800 | (3,100)| Other| 66,300 | 66,800 | 64,900 | 65,000 | 500 | 100 | 400 | Total assets| 762,400 | 762,600 | 725,600 | 728,500 | 200 | 2,900 | (2,700)| Liabilities:| ? | ? | ? | ? | ? | ? | ? |Deposits| 1,127,800 | 1,128,300 | 930,400 | 931,500 | 500 | 1,100 | (600)| Accounts payable and other liabilities| 167,000 | 166,900 | 138,200 | 138,200 | (100)| – | (100)| Beneficial interests issued by consolidated VIEs| 66,000 | 66,200 | 77,600 | 77,900 | 200 | 300 | (100)| Long-term debt and junior subordinated deferrable interest debentures| 256,800 | 254,200 | 270,700 | 271,900 | (2,600)| 1,200 | (3,800)| Total liabilities| 1,617,600 | 1,615,600 | 1,416,900 | 1,419,500 | (2,000)| 2,600 | (4,600)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? ? | ? | 2,200 | 300 | 1,900 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? | ? | 1,140 | Adjustment s for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 1,067 | Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (279)| Cash flow hedge| ? | ? | ? | ? | ? | ? | (155)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,773 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 18,976 | Full fair value income with information available| ? ? | ? | ? | ? | ? | 20,749 | Citi Group In $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet? | Assets:| ? | ? | ? | ? | ? | ? | ? | Investment| 293,400 | 292,400 | 318,200 | 319,000 | (1,000)| 800 | (1,800)| Loans| 614,600 | 603,900 | 605,500 | 584,300 | (10,700)| (21,200)| 10,500 | Total assets| 908,000 | 896,300 | 923,700 | 903,300 | (11,700)| (20,400)| 8,700 | Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 865,900 | 865,800 | 845,000 | 843,200 | (100)| (1,800)| 1,700 | Long-term debt| 323,500 | 313,800 | 381,200 | 384,500 | (9,700)| 3,300 | (13,000)| Total liabilities| 1,189,400 | 1,179,600 | 1,226,200 | 1,227,700 | (9,800)| 1,500 | (11,300)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | (1,900)| (21,900)| 20,000 | Aftertax adjustments before AFS securities and CFH derivatives| ? ? | ? | ? | ? | ? | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 2,360 | Cash flow hedge| ? | ? | ? | ? | ? | ? | (170)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 14,190 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 11,215 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 25,405 | Financial Analysis of Bank of America Financial Statement Analysis of Bank of America Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of Bank of America1 1. 1Balance sheet1 1. 2Income statement2 1. 3Regulatory capital ratios2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1Bank of America3 1. 5. 2JP Morgan Chase3 1. 5. 3Citi Group3 1. 6Netting Financial Instruments3 1. 6. 1Bank of America4 1. 6. 2Comparable banks4 1. 6. 3Analysis of the impact4 2Fair Value Accounting for Financial Instruments4 2. Fair value accounting4 Table 6 Summary of the Fair Value Income5 2. 2Opinions about fair value accounting5 3Interest Rate Risk and Net Interest Earnings6 3. 1Net interest margin6 3. 2Interest rate risk7 4Credit Risk and Losses7 4. 1Main loss reserve adequacy ratios8 4. 2Policy to designate past due loans as non-performing8 4. 3Adequacy of the bank’s allowance for loan losses8 4. 4Disclosure policies relating to loans8 5Appendix9 * Part 1 Financial Statements of Bank of America . 1. 1 Balance sheetBank of America’s balance sheet has total assets of $2,129,046 million in 2011, which is less than last year’s $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41. 92% of the total assets. The next largest asset was Available-For-Sale securities making up 12. 97% of total assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U. S. offices both interest bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was long-term debt at 19. % of total liabilities. In millions| 2011| % of total assets| 2010| % of total assets| % chg from 2010-2011| Total asset| 2,029,046 | 100. 00%| 2,264,909 | 100. 00%| -10. 41%| Loans and leases| 892,417 | 43. 98%| 898,555 | 39. 67%| -0. 68%| Available-for-sale| 276,151 | 13. 61%| 337,627 | 14. 91%| -18. 21%| Total liabilities| 1,898,945 | 93. 59%| 2,036,661 | 89. 92%| -6. 76%| Total deposits| 1,033,041 | 50. 91%| 1,010,430 | 44. 61%| 2. 24%| Deposits in U. S. offices| 957,042 | 47. 17%| 930,913 | 41. 10%| 2. 81%| Long-term debt| 372,265 | 18. 35%| 448,431 | 19. 80%| -16. 98%| Leverage ratio| 14. 0 | ? | 8. 92 | ? | 63. 58%| Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chase’s total deposits 54. 6% and long-term debt 22. 77% of total lia bilities, while Citi has deposits 51. 11% and long-term debt of 19. 09%. According to the deposits in U. S. offices, BOA focus more in U. S market and Citi focus more on market outside U. S. In millions| Bank of America| % of total assets| JP Morgan Chase| % of total assets| Citi Group| % of total assets| Total asset| 2,129,046 | 100. 00%| 2,265,792 | 100. 00%| 1,873,878 | 100. 00%| Loans and leases| 892,417 | 41. 92%| 696,111 | 30. 72%| 617,127 | 32. 93%| Available-for-sale| 276,151 | 12. 97%| 364,793 | 16. 10%| 293,413 | 15. 66%| ? | ? | ? | ? | ? | ? | ? |In millions| Bank of America| % of total liabilities| JP Morgan Chase| % of total liabilities| Citi Group| % of total liabilities| Total liabilities| 1,898,945 | 100. 00%| 2,082,219 | 100. 00%| 1,694,305 | 100. 00%| Total deposits| 1,033,041 | 54. 40%| 1,127,806 | 54. 16%| 865,936 | 51. 11%| Long-term debt| 372,265 | 19. 60%| 256,775 | 22. 77%| 3,235,050 | 190. 94%| Leverage ratio| 8. 25 | ? | 11. 34 | ? | 9. 44 | ? | | | | | | | | In millions| Bank of America| % of total deposits| JP Morgan Chase| % of total deposits| Citi Group| % of total deposits| Deposits in U. S. offices| 957,042 | 92. 64%| 851,534 | 75. 0%| 343,288 | 39. 64%| Table 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the event of a bank run, Bank of America will be in trouble due to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including cash and cash equivalents of $120,102 million, time deposits and other short-term investments of $26,004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it will still only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of America’s income statement is net income of $1,446 million, which increased compared to a net loss of 2,238 in 2010. Interest income was $66 ,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the net interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, decreased by 16. 8% from 2010. This is partly due to the big loss of mortgage banking income, decreasing from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line while having net interest income decrease slightly. Regulatory capital ratios 2011| Bank of America| JP Morgan Chase| Citi Group| To be well capitalized| Leverage ratio| 7. 53%| 6. 80%| 7. 19%| 5%| Tier 1 risk-based capital ratio| 12. 40%| 12. 30%| 13. 55%| 6%| Total risk-based| 16. 75%| 15. 40%| 16. 99%| 10%| Table 3 Regulatory Capital Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all three regulatory ratios–Tier 1 capital, risk-based capital and leverage.Ba nk of America slightly increased all of its ratios from 2010 to 2011. Its tier 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly important; however there are some issues with them. The ratios are backwards looking, so there could be a large amount of change since in the numbers. There are also lots of adjustments made by the company to the different numbers that make up the ratio that might not even make sense such as ignoring AFS losses. The current risk weighting is also ve ry simplistic currently and might not reflect the actual risk of the assets.One important thing to note is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be implemented by January 1, 2015. According to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of potential financial meltdowns, it should hold more and better quality capital, carry more liquid ssets, and limit leverage. ( , ) Investment portfolio The net unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognized in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed other than temporarily (OTT) i mpaired, so that amortized cost is the carrying value. Amortized cost is a highly limited valuation basis for risky securities. There was very little mention of reclassification in Bank of America’s 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning equity securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). Only credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 is $360 million, and portion of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in earnings on AFS debt securities in 2011, compared to $970 million on AFS debt and mark etable equity securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesn’t divide these amounts into credit-related portion and non-credit related portion. Based on the other two banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after adoption. Citi Group Citigroup also adopted the same rules above in first quarter of 2009. As a result of the FSP, Company’s Consolidated Statement of Income reflects the full impairment on debt securiti es that the Company intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis.As a result of the adoption of the FSP, Citigroup’s income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was decreased by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss component of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Netting Financial Instruments | Â  | Bank of America| JP Morgan Chase| Citi Group| IFRS(Before netting)| Total assets| 2,130,796| 3,976,317| 2,749,470| | Total debt| 1,900,695| 3,792,742| 2,564,671| | Total equity| 230,101| 183,575| 184,799| | Leverage ratio| 8. 26| 20. 66| 13. 88| GAAP(After netting)| Total assets| 2,129,046| 2,265,792| 1,873,878| | Total debt| 1,898,945| 2,082,219| 1,694,305| | Total equity| 230,101| 183,573| 179,573| | Leverage ratio| 8. 25| 11. 34| 9. 44| Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4—Derivatives, Bank of America had legally enforceable master netting agreement that would reduce both derivative assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash collateral was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldn’t affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross derivative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was insignificant compared to Bank of America’s total asset base (2,129,046 million, about 0. 08%). Th erefore, the leverage ratio would only increase slightly due to this change, from 8. 25 under GAAP to 8. 26 under IFRS. Comparable banks J. P. Morgan Chase’s gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chase’s total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a much higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Group’s netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against derivative liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of t he netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the presentation of netting financial instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a distinguished difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive picture of banks’ derivative instruments; however, it would overstate risk to some extent. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant metrics than the gross amounts. Naturally, this comes about from looking to the way that derivatives are traded under an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the replacement by a single net am ount. Secondly, another metric to measure derivative portfolios is volatility which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change before solvency is affected. Finally, as the third most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. Collateral amounts further reduce the risks and have to be taken into consideration for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting From table 5 and the three computation tables in Appendix, we can see that under Full Fair Value method, Bank of America’s net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi w ould experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions| Bank of America| JP Morgan Chase| Citi Group| Adjustments for assets and liabilities at HC on balance sheet| 6,127 | 1,140 | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| -4,819 | 633 | 2,190 | Total adjustment| 1,308 | 1,773 | 14,190 | Net income as per financial statements| 1,446 | 18,976 | 11,215 | Full fair value income with information available| 2,754 | 20,749 | 25,405 | * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as it had a significant unrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, su ch difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any specific events affecting the operations of the issuer, underlying assets that collateralize the debt security, other industry and macroeconomic conditions, and management’s intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses included in accumulated OCI. In 2011, the fair value of net ALM contracts decreased $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair value accounting Fair Value Accounting has many advantages and disadvantages as listed below. FVA advantages include the following: FVA depicts a clearer picture of the company’s financi al situation, as it provides an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers’ ability to manipulate the reported net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For Level 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the selective realization of cumulative unrealized gains and losses on positions, an activity referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typi cally is persistent for as long as firms hold positions, but becomes transitory when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include: The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A solution for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price may change back to the normal level. Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Manager s need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the drop in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and there’s no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair value for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any signif icant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk exposure and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, especially during financial crisis.Fair value accounting would further contribute to the deterioration in the value of a company’s financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under today’s economy. FVA provides better insight of the financial statements, in ddition to limiting the potential for manipulation. However, in my opinion, under today’s economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to: (1).There’s a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78% to 4. 18%. (2). Noninterest income declined from the previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warrant ies costs and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of America's income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in modeled prepayment expectations, and increased hedge ineffectiveness. (4). Bank of America’s declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such downward trend in net interest margin can be observed in other banks as well. The following table presents total interest-earning assets rate and total interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks experienced a decline in interest-earning assets rate over three years: 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year; 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8%; 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks’ declining net interest margin were higher deposit balances with lower loan yields. | Bank of America| JP Morgan Chase| Citi Group| | 2011| 2010| 2009| 2011| 2010| 2009| 2011| 2010| 2009| Total interest-earning assets rate| 3. 65%| 4. 02%| 4. 31%| 3. 51%| 3. 83%| 4. 04%| 4. 27%| 4. 55%| 4. 78%| Total interest-bearing liabilities| 1. 39%| 1. 39%| 1. 77%| 0. 86%| 0. 84%| 1. 02%| 1. 63%| 1. 61%| 1. 3%| Table 6 Net Interest Margin of Three Banks Interest rate risk BOA’s net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel shift in interest rate. 1% downward change in interest rate results in a bigger decrease in net interest income in 2011 than in 2010. However , according Chase’s 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward shift| 2011| 2010| BOA| ($2,122)| ($998)| JP Morgan Chase| NM| NM| Citi Group| NM| NM| Table 7 The Impact of 1% downward shift on Net Interest Income BOA’s net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upward parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase and smaller impact for Citi. 1% upward shift| 2011| 2010| Bank of America| $1,505 | $601 | JP Morgan Chase| $2,326 | $1,483 | Citi Group| $97 | ($105)| Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the bank’s allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Held-to maturity debt securities| 35,265 | 35,442 | 427 | 427 | 177 | – | 177 | Loans| 870,520 | 843,392 | 876,739 | 861,695 | (27,128)| (15,044)| (12,084)| Total assets| 905,785 | 878,834 | 877,166 | 862,122 | (26,951)| (15,044)| (11,907)| Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 1,033,041 | 1,033,248 | 1,010,430 | 1,010,460 | 207 | 30 | 177 | Long-term debt| 372,265 | 343,211 | 448,431 | 441,672 | (29,0 54)| (6,759)| (22,295)| Total liabilities| 1,405,306 | 1,376,459 | 1,458,861 | 1,452,132 | (28,847)| (6,729)| (22,118)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | 1,896 | (8,315)| 10,211 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? ? | 6,127 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? | Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | (4,270)| Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (549)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,308 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 1,446 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 2,754 | JP Morgan ChaseIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Loans| 696,100 | 695,800 | 660,700 | 663,500 | (300)| 2,800 | (3,100)| Other| 66,300 | 66,800 | 64,900 | 65,000 | 500 | 100 | 400 | Total assets| 762,400 | 762,600 | 725,600 | 728,500 | 200 | 2,900 | (2,700)| Liabilities:| ? | ? | ? | ? | ? | ? | ? |Deposits| 1,127,800 | 1,128,300 | 930,400 | 931,500 | 500 | 1,100 | (600)| Accounts payable and other liabilities| 167,000 | 166,900 | 138,200 | 138,200 | (100)| – | (100)| Beneficial interests issued by consolidated VIEs| 66,000 | 66,200 | 77,600 | 77,900 | 200 | 300 | (100)| Long-term debt and junior subordinated deferrable interest debentures| 256,800 | 254,200 | 270,700 | 271,900 | (2,600)| 1,200 | (3,800)| Total liabilities| 1,617,600 | 1,615,600 | 1,416,900 | 1,419,500 | (2,000)| 2,600 | (4,600)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? ? | ? | 2,200 | 300 | 1,900 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? | ? | 1,140 | Adjustment s for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 1,067 | Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (279)| Cash flow hedge| ? | ? | ? | ? | ? | ? | (155)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,773 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 18,976 | Full fair value income with information available| ? ? | ? | ? | ? | ? | 20,749 | Citi Group In $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet? | Assets:| ? | ? | ? | ? | ? | ? | ? | Investment| 293,400 | 292,400 | 318,200 | 319,000 | (1,000)| 800 | (1,800)| Loans| 614,600 | 603,900 | 605,500 | 584,300 | (10,700)| (21,200)| 10,500 | Total assets| 908,000 | 896,300 | 923,700 | 903,300 | (11,700)| (20,400)| 8,700 | Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 865,900 | 865,800 | 845,000 | 843,200 | (100)| (1,800)| 1,700 | Long-term debt| 323,500 | 313,800 | 381,200 | 384,500 | (9,700)| 3,300 | (13,000)| Total liabilities| 1,189,400 | 1,179,600 | 1,226,200 | 1,227,700 | (9,800)| 1,500 | (11,300)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | (1,900)| (21,900)| 20,000 | Aftertax adjustments before AFS securities and CFH derivatives| ? ? | ? | ? | ? | ? | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 2,360 | Cash flow hedge| ? | ? | ? | ? | ? | ? | (170)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 14,190 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 11,215 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 25,405 |

Friday, January 10, 2020

Effects of syntax bill to student smokers of Mindanao University of Science and Technology Essay

It is our great honor and respect for those persons who acknowledge to our study about â€Å"The effects of Syntax Bill to selected student smokers of Mindanao University of Science and Technology, SY. 2012-2013†. That we researchers are very thankful to the following: To our English 20 professor Dr. Erly M. Maglangit, for helping we finish our study. And for giving also this very interesting topic with regards to the student smokers here in our School or in this University. To my group who gives their ideas about our research and for their cooperation and teamwork for us to finish our study. To overall students who gives their moral support with regards to this study. To my classmate Genevieve Tagolimot for allowing me to used her laptop. To the parents above all that who are very supportive to their sons and daughters and keeping those sending school every day in this constitution which is the Mindanao University of Science and Technology. Once again, we are very thankful to all of you, without your moral support our studies will not be finish. Abstract For the past days, weeks, and months, SIN-tax Bill has been the content of the news reports on television, radio, and newspapers. It also garnered different reactions and views from different group of citizens, smokers or not. This bill was called SIN-Tax Bill because it proposes additional tax collection to bad vices such as cigarette and liquors. The proponents of the bill have said that it will give large amount of profit to the country as per the Department of Finance. This study purposes to know what the possibilities effects of House Bill 5727 are or what we called Sin Tax Bill. This law was approved by the congress and our President Benigno Simeon Aquino III for this law gives a higher tax or price will be given to the liquors or alcohols and especially to the cigarettes. Our study focuses to the selected student smokers of Mindanao University of Science and Technology and asking question to them on what are the effects of Sin Tax Bill to them as a Smoker. Most of the student smokers of Mindanao University of Science and Technology are not affected of House Bill 5727 or what we called Sin Tax Bill implementation. We also found out that one of the effects of Syntax Bill is the reduction of cigarettes stick of the smokers. That Sin tax bill helps to minimize the students smoker in smoking due to higher price of cigarettes. Even if House Bill 5727 is implemented students smokers in this University are able to continue their studies while others are not able able to focused their lessons if they can’t smoke cigarettes or tobaccos. Lastly, researchers also found out that there is no significant effects of House Bill 5727 or Sin Tax Bill. Though, most of the student smokers passed in all their subjects, but it is wise for them to quit or leave smoking for their health’s sake. Since, Sin Tax Bill reduces spending of the student smokers it will better for them to quit smoking so they can save spent their money to a very important projects in school. Lastly, it will be better for the school administration to conduct weekly SMOKING SYMPOSIUM about the harmful effects of smoking.   When Sin tax Bill was implemented in the Philippines, tobacco and cigar consumers were stunned whether the said law is in full implementation. Of course, those whose puffs are unavoidable and uncontrollable might oppose to this law. The only interest on their part is the money spent for the cigar. Others smokers disliked the law for it means additional â€Å"TAX INCORPORATED IN THIS BILL BUT THERE IS NO WAY TO ESCAPE THE LAW. SMOKERS MUST COMPLY WITH THE LAW†. They are not banned to smoke but they will only compromise the increase or value of the cigarette. This is the only means to control the additional burden of the Philippine government. The Philippine government spends billion a year for medicine for those who suffer lung cancer cited from Manila Bulletin, dated January 14, 2013). Based from the DOST, second hand smoking is so dangerous that it will take only few months to notice cancer sickness. This means to say that cancer cells will be triggered when nicotine enters the body direct to the lungs. The usual sicknesses for those who smoke are lung cancer, throat cancer, prostate cancer and anal cancer. Mindanao University of Science and Technology where the study was conducted about the effects of Syntax Bill to the selected student smokers’ wherein the selected students’ of MUST are involved. Since, sicknesses and no matter how posts of information in TV and in school campus on SMOKE FREE ZONE school, still without the monitor of the school administration, students’ smokers continue their journey towards smoking and the unseen effect in the future. Syntax is a tax levied on a certain goods and services that are seen vices, such as alcohol, tobacco and the like. Syntax is used for taxing activities that are considered undesirable. These types of taxes are levied by the government to discourage individuals from partaking in such activities without making the use of the products illegal. Like other taxes, sin tax also provides a source of government revenue. According to our research, Syntax Bill is often called â€Å"SIN TAXES,† because these taxes are, likewise, aimed at trying to â€Å"dissuade consumers from excessive intake of these potentially harmful products. â€Å"There is no disputing the â€Å"what†: House Bill 5727 is a measure that seeks to unify and increase the excise tax rates for alcohol and especially for cigarettes. This is also incites and provokes different responses, simply because this bill, if passed, would mean different things to different people. Manufacturers argue against the measure, primarily, on the following points: (1) it is the low-income earning earner consumers (who can only afford the lower-priced products) who will feel the pinch; (2) the decline in sales (from this segment of the market) will result in decreased production; (3) and that the decrease in production will inevitably lead to massive lay-offs. Smoking is an important risk factor for the three diseases that cause most deaths: heart disease, stroke and lung cancer. It is responsible for around 80% of all lung cancer deaths and 20% of all cancer deaths. Smoking has also been linked to cancers of the mouth, bladder, kidney, stomach and cervix, among other. Smokers are also at increased risk at having reduced lung function from chronic obstructive pulmonary disease. Using tobacco has been linked a variety of 3 other conditions, such as diabetes, peptic ulcers, some vision problems, and back pain. Smoking in pregnancy can lead to miscarriage, still birth or premature birth. Statement of the Problem The following are the statements of the problem: 1. What are the effects of Syntax bill to the student smokers of Mindanao University of Science and Technology? 2. What are the effects of Syntax bill to the non-smokers of Mindanao University of Science and Technology? 3. What is their stand as to smoking and studying done simultaneously? 4. Is smoking not a problem of the student smokers’ studies? Importance of the Study Syntax bill is House Bill 5727 which means— a measure that seeks to unify and increase the excise tax rates for alcohol and especially for cigarettes. Is it important that we know the effect syntax bill to the selected student smokers of Mindanao University of Science and Technology. This study also asks the students on how the cigarettes, tobacco, and etc. affect their daily life, especially in the field of their studies.

Thursday, January 2, 2020

Essay Disillusionment With the American Political System

The last forty years in America have seen tremendous changes technologically and culturally. Life has become increasingly easier as machines designed to improve living standards proliferated. Communications and travel capabilities have advanced dramatically, with long distance phone calls a thing of the past. Computers and smart phones have made an infinite amount of information readily available to students who can now conduct their research from anywhere. Socially the changes have been just as tremendous, though perhaps not always for the better. Divorce rates have skyrocketed. Children frequently massacre one another on school grounds. The income inequality gap has steadily risen. Overall, Americans are feeling less connected to†¦show more content†¦If this does happen, if social apathy is any way mended as a result of online communications forums, it is most likely that it will have a direct effect on political apathy as well. As political participation is dependent on the social connectedness of its citizens, one cannot change without affecting the other. Political Participation Model Political participation is a highly-varied and complex issue. While voter turnout may be the easiest form of it to quantify, the whole of political participation is not summed up by who votes and who does not. An individual may not choose to vote, but instead choose to contribute either their time or money to a campaign, or contact their elected official, or attend a demonstration, or volunteer on a community action committee, or participate in the activities of an interest group, etc. Even with all of the different forms of political participation, there is a good model for predicting which individuals will be the most politically active. 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