Barclays 2012 Annual Report Download - page 244

Performance
The notes included in this section focus on the results and performance of the Group. Information on the segmental
performance, income generated, expenditure incurred, 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 207 and 208.
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.
See also Note 14 – Financial assets designated at fair value and Note 17 – Financial liabilities designated at fair value for relevant accounting
policies.
2012
£m
2011
£m
2010
£m
Cash and balances with central banks 253 392 271
Available for sale investments 1,720 2,137 1,483
Loans and advances to banks 369 350 440
Loans and advances to customers 16,461 17,271 17,677
Other 396 439 164
Interest income 19,199 20,589 20,035
Deposits from banks (257) (366) (370)
Customer accounts (2,480) (2,526) (1,410)
Debt securities in issue (2,929) (3,524) (3,632)
Subordinated liabilities (1,632) (1,813) (1,778)
Other (262) (159) (322)
Interest expense (7,560) (8,388) (7,512)
Net interest income 11,639 12,201 12,523
Interest income includes £211m (2011: £243m, 2010: £213m) 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 256.
barclays.com/annualreport242 I Barclays PLC Annual Report 2012
Notes to the financial statements
For the year ended 31 December 2012 continued