Barclays 2011 Annual Report Download - page 241

22 Finance leases continued
Finance lease liabilities
The Group leases items of property, plant and equipment on terms that meet the definition of finance leases. Finance lease liabilities are included within
accruals, deferred income and other liabilities (see Note 28).
As at 31 December 2011, the total future minimum payments under finance leases were £64m (2010: £87m), of which £10m (2010: £16m) was due
within one year. As at 31 December 2011, the carrying amount of assets held under finance leases was £28m (2010: £29m).
23 Reclassification of financial assets held for trading
Accounting for the reclassification of financial assets held for trading
In accordance with IAS 39, where the Group no longer intends to trade in financial assets it may transfer them out of the held for trading
classification and measure them at amortised cost if they meet the definition of a loan. The initial value used for the purposes of establishing
amortised cost is fair value on the date of the transfer.
Prior to 2010, the Group reclassified certain financial assets, originally classified as held for trading that were deemed to be not held for trading
purposes to loans and receivables. There were no reclassifications of financial assets during 2011 or 2010.
The carrying value of the securities previously reclassified into loans and receivables has decreased from £8,625m to £7,652m primarily as a result of
sales, paydowns and maturities of the underlying securities, and increases due to the reversal of the discount on reclassification. Sales of securities from
the 16 December 2008 reclassification totalled £91m (31 December 2010: £390m) and sales of securities from the 25 November 2009 reclassification
totalled £482m (31 December 2010: £178m).
The following table provides a summary of the assets reclassified from held for trading to loans and receivables.
2011 2010
Carrying
value
£m
Fair
value
£m
Carrying
value
£m
Fair
value
£m
As at 31 December
Trading assets reclassified to loans and receivables
Reclassification 25 November 2009 7,434 7,045 8,081 7,842
Reclassification 16 December 2008 218 217 544 545
Total financial assets reclassified to loans and receivables 7,652 7,262 8,625 8,387
If the reclassifications had not been made, the Group’s income statement for 2011 would have included a net loss on the reclassified trading assets of
£152m (2010: loss of 189m). The reclassified financial assets contributed £396m (2010: £359m) to interest income.
24 Reverse repurchase and repurchase agreements including other similar lending and borrowing
Reverse repurchase agreements (and stock borrowing or similar transaction) are a form of secured lending whereby the Group provides a loan or cash
collateral in exchange for the transfer of collateral, generally in the form of marketable securities subject to an agreement to transfer the securities back
at a fixed price in the future. Repurchase agreements are where the Group obtains such loans or cash collateral, in exchange for the transfer of collateral.
Accounting for reverse repurchase and repurchase agreements including other similar lending and borrowing
The Group purchases (a reverse repurchase agreement) or borrows securities subject to a commitment to resell or return them. The securities are
not included in the balance sheet as the Group does not acquire the risks and rewards of ownership. Consideration paid (or cash collateral provided)
is accounted for as a loan asset at amortised cost.
The Group may also sell (a repurchase agreement) or lend securities subject to a commitment to repurchase or redeem them. The securities are
retained on the balance sheet as the Group retains substantially all the risks and rewards of ownership. Consideration received (or cash collateral
provided) is accounted for as a financial liability at amortised cost.
2011
£m
2010
£m
Assets
Banks 64,470 104,233
Customers 89,195 101,539
Reverse repurchase agreements and other similar secured lending 153,665 205,772
Liabilities
Banks 69,544 99,997
Customers 137,748 125,537
Repurchase agreements and other similar secured borrowing 207,292 225,534
Barclays PLC Annual Report 2011 www.barclays.com/annualreport 239
The strategic report Governance Risk management Financial review Financial statements Shareholder informationThe strategic report Governance Risk management Financial review Financial statements Shareholder information