Barclays 2014 Annual Report Download - page 329

barclays.com/annualreport Barclays PLC Annual Report 2014 I 327
Notes to the financial statements
Scope of consolidation
36 Principal subsidiaries
Barclays applies IFRS 10 Consolidated Financial Statements. The consolidated financial statements combine the financial statements of
Barclays PLC and all of its subsidiaries. Subsidiaries are entities over which the Group has control. Under IFRS 10, this is when the Group is
exposed or has rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the
entity.
The Group reassesses whether it controls an entity if facts and circumstances indicate that there have been changes to its power, its rights to
variable returns or its ability to use its power to affect the amount of its returns.
Intra-group transactions and balances are eliminated on consolidation and consistent accounting policies are used throughout the Group for
the purposes of the consolidation. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after
control has been obtained and they do not result in loss of control.
The significant judgements used in applying this policy are set out below.
Accounting for investment in subsidiaries
In the individual financial statements of Barclays PLC, investments in subsidiaries are stated at cost less impairment. Cost includes any directly
attributable costs of the investment.
Principal subsidiaries for the Group are set out below. This includes those subsidiaries that are most significant in the context of the Group’s
business, results or financial position.
Company name
Principal place of business
or incorporation Nature of business
Percentage
of voting
rights held
%
Non-
controlling
interests –
proportion of
ownership
interests
%
Non-
controlling
interests –
proportion of
voting
interests
%
Barclays Bank PLC England Banking, holding company 100 11 –
Barclays Capital Securities Limited England Securities dealing 100 – –
Barclays Private Clients International Limited Isle of Man Banking 100* – –
Barclays Securities Japan Limited Japan Securities dealing 100 – –
Barclays Africa Group Limited South Africa Banking 62 38 38
Barclays Bank S.A.U. Spain Banking 100* – –
Barclays Capital Inc. United States Securities dealing 100 – –
Barclays Bank Delaware United States Credit card issuer 100 – –
The country of registration or incorporation is also the principal area of operation of each of the above subsidiaries. Investments in subsidiaries
held directly by Barclays Bank PLC are marked *. Information on the Group’s subsidiaries, as required by the Companies Act, will be included in the
Annual Return to be filed at the UK Companies House.
Ownership interests are in some cases different to voting interests due to the existence of non-voting equity interests, such as preference shares.
See Note 33 Non-controlling interests for more information.
At the balance sheet date, a contractual agreement for the sale and transfer of Barclays Bank S.A.U. and its subsidiaries, comprising all its
associated assets and liabilities to a third party, Caixabank, S.A. was in place. The sale took place on 2 January 2015, but Barclays Bank S.A.U. was
still a principal subsidiary at the balance sheet date.
Significant judgements and assumptions used to determine the scope of the consolidation
Determining whether the Group has control of an entity is generally straightforward based on ownership of the majority of the voting capital.
However, in certain instances this determination will involve significant judgement, particularly in the case of structured entities where voting
rights are often not the determining factor in decisions over the relevant activities. This judgement may involve assessing the purpose and design
of the entity. It will also often be necessary to consider whether the Group, or another involved party with power over the relevant activities, is
acting as a principal in its own right or as an agent on behalf of others.
There is also often considerable judgement involved in the ongoing assessment of control over structured entities. In this regard, where market
conditions have deteriorated such that the other investors’ exposures to the structure’s variable returns have been substantively eliminated, the
Group may conclude that the managers of the structured entity are acting as its agent and therefore will consolidate the structured entity.
This section presents information on the Group’s investments in subsidiaries, joint ventures and associates and its
interests in structured entities. Detail is also given on securitisation transactions the Group has entered into and
arrangements that are held off-balance sheet.
The Strategic Report Governance Risk review Financial review Financial statements Shareholder information