Barclays 2011 Annual Report Download - page 210

Notes to the financial statements
Performance
The notes included in this section focus on the results and performance of Barclays.
Information on the income generated, expenditure incurred, segmental performance,
tax, earnings per share and dividends are included here.
2 Segmental reporting
Presentation of segmental reporting
The Group’s segmental reporting is in accordance with IFRS 8 Operating Segments. Operating segments are reported in a manner consistent with
the internal reporting provided to the Executive Committee, which is responsible for allocating resources and assessing performance of the
operating segments and has been identified as the chief operating decision maker. All transactions between business segments are conducted on
an arm’s length basis, with intra-segment revenue and costs being eliminated in Head Office. Income and expenses directly associated with each
segment are included in determining business segment performance.
An analysis of the Group’s performance by business segment and income by geographic segment is included on pages 173 and 174.
3 Net interest income
Accounting for interest income and expense
The Group applies IAS 39 Financial Instruments: Recognition and Measurement. Interest income on loans and advances at amortised cost, available
for sale debt investments, and interest expense on financial liabilities held at amortised cost, are calculated using the effective interest method which
allocates interest, and direct and incremental fees and costs, over the expected lives of the assets and liabilities.
The effective interest method requires the Group to estimate future cash flows, in some cases based on its experience of customers’ behaviour,
considering all contractual terms of the financial instrument, as well as the expected lives of the assets and liabilities. Due to the large number of
products and types (both assets and liabilities), there are no individual estimates that are material to the results or financial position.
2011
£m
2010
£m
2009
£m
Cash and balances with central banks 392 271 131
Available for sale investments 2,137 1,483 1,937
Loans and advances to banks 350 440 513
Loans and advances to customers 17,271 17,677 18,456
Other 439 164 199
Interest income 20,589 20,035 21,236
Deposits from banks (366) (370) (634)
Customer accounts (2,526) (1,410) (2,716)
Debt securities in issue (3,524) (3,632) (3,889)
Subordinated liabilities (1,813) (1,778) (1,718)
Other (159) (322) (361)
Interest expense (8,388) (7,512) (9,318)
Net interest income 12,201 12,523 11,918
Interest income includes £243m (2010: £213m, 2009: £185m) accrued on impaired loans.
Other interest income principally includes interest income relating to reverse repurchase agreements and hedging activity. Similarly, other interest
expense principally includes interest expense relating to repurchase agreements and hedging activity.
Included in net interest income is hedge ineffectiveness as detailed on page 223.
For the year ended 31 December 2011 continued
208 Barclays PLC Annual Report 2011 www.barclays.com/annualreport