Barclays 2014 Annual Report Download - page 300

298 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Financial instruments held at amortised cost
Notes to the financial statements
21 Finance leases
Accounting for finance leases
The Group applies IAS 17 Leases in accounting for finance leases, both where it is the lessor or the lessee. A finance lease is a lease which
confers substantially all the risks and rewards of the leased assets on the lessee. Where the Group is the lessor, the leased asset is not held on
the balance sheet; instead a finance lease receivable is recognised representing the minimum lease payments receivable under the terms of the
lease, discounted at the rate of interest implicit in the lease. Where the Group is the lessee, the leased asset is recognised in property, plant and
equipment and a finance lease liability is recognised, representing the minimum lease payments payable under the lease, discounted at the rate
of interest implicit in the lease.
Interest income or expense is recognised in interest receivable or payable, allocated to accounting periods to reflect a constant periodic rate of
return.
Finance lease receivables
Finance lease receivables are included within loans and advances to customers. The Group specialises in asset-based lending and works with a
broad range of international technology, industrial equipment and commercial companies to provide customised finance programmes to assist
manufacturers, dealers and distributors of assets.
2014 2013
Gross
investment
in finance
lease
receivables
£m
Future
finance
income
£m
Present
value of
minimum
lease
payments
receivable
£m
Un-
guaranteed
residual
values
£m
Gross
investment
in finance
lease
receivables
£m
Future
finance
income
£m
Present
value of
minimum
lease
payments
receivable
£m
Un-
guaranteed
residual
values
£m
Not more than one year 2,139 (304) 1,835 125 2,004 (286) 1,718 93
Over one year but not more than five years 4,159 (682) 3,477 293 4,308 (662) 3,646 268
Over five years 213 (40) 173 17 539 (76) 463 85
Total 6,511 (1,026) 5,485 435 6,851 (1,024) 5,827 446
The impairment allowance for uncollectable finance lease receivables amounted to £82m (2013: £129m).
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 Note 26 Accruals, deferred income and other liabilities.
As at 31 December 2014, the total future minimum payments under finance leases were £14m (2013: £19m), of which £5m (2013: £5m) was due
within one year. The carrying amount of assets held under finance leases was £31m (2013: £16m).
22 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.
2014
£m
2013
£m
Assets
Banks 39,528 67,889
Customers 92,225 118,890
Reverse repurchase agreements and other similar secured lending 131,753 186,779
Liabilities
Banks 49,940 66,896
Customers 74,539 129,852
Repurchase agreements and other similar secured borrowing 124,479 196,748