Barclays 2014 Annual Report Download - page 335

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38 Investments in associates and joint ventures
Accounting for associates and joint ventures
Barclays applies IAS 28 Investments in Associates and IFRS 11 Joint Arrangements. Associates are entities in which the Group has significant
influence, but not control, over the operating and financial policies. Generally the Group holds more than 20%, but less than 50%, of their
voting shares. Joint ventures are arrangements where the Group has joint control and rights to the net assets of the entity.
The Group’s investments in associates and joint ventures are initially recorded at cost and increased (or decreased) each year by the Group’s
share of the post acquisition profit (or loss). The Group ceases to recognise its share of the losses of equity accounted associates when its
share of the net assets and amounts due from the entity have been written off in full, unless it has a contractual or constructive obligation to
make good its share of the losses. In some cases, investments in these entities may be held at fair value through profit or loss, for example,
those held by private equity businesses.
There are no individually significant investments in joint ventures or associates held by Barclays.
2014 2013
Associates
£m
Joint
ventures
£m
Total
£m
Associates
£m
Joint
ventures
£m
Total
£m
Equity accounted 303 408 711 275 378 653
Held at fair value through profit or loss 307 366 673 610 400 1,010
Total 610 774 1,384 885 778 1,663
Summarised financial information for the Group’s equity accounted associates and joint ventures is set out below. The amounts shown are the net
income of the investees, not just the Group’s share for the year ended 31 December 2014 with the exception of certain undertakings for which the
amounts are based on accounts made up to dates not earlier than three months before the balance sheet date.
Associates Joint ventures
2014
£m
2013
£m
2014
£m
2013
£m
(Loss) or profit from continuing operations (9) (51) 146 144
Other comprehensive income 13 3 (5) (20)
Total comprehensive income/(loss) 4 (48) 141 124
Unrecognised shares of the losses of individually immaterial associates and joint ventures were nil (2013: nil).
The Group’s associates and joint ventures are subject to statutory requirements such that they cannot make remittances of dividends or make
loan repayments to Barclays PLC without agreement from the external parties.
The Group’s share of commitments and contingencies of its associates and joint ventures comprised unutilised credit facilities provided to
customers of £1,566m (2013: £2,156m). In addition, the Group has made commitments to finance or otherwise provide resources to its joint
ventures and associates of £183m (2013: £74m).
39 Securitisations
Accounting for securitisations
The Group uses securitisations as a source of finance and a means of risk transfer. Such transactions generally result in the transfer of
contractual cash flows from portfolios of financial assets to holders of issued debt securities.
Securitisations may, depending on the individual arrangement, result in continued recognition of the securitised assets and the recognition of
the debt securities issued in the transaction; lead to partial continued recognition of the assets to the extent of the Group’s continuing
involvement in those assets or to derecognition of the assets and the separate recognition, as assets or liabilities, of any rights and obligations
created or retained in the transfer. Full derecognition only occurs when the Group transfers both its contractual right to receive cash flows from
the financial assets, or retains the contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to
another party without material delay or reinvestment, and also transfers substantially all the risks and rewards of ownership, including credit
risk, prepayment risk and interest rate risk.
In the course of its normal banking activities, the Group makes transfers of financial assets, either legally (where legal rights to the cash flows from
the asset are passed to the counterparty) or beneficial (where the Group retains the rights to the cash flows but assumes a responsibility to
transfer them to the counterparty). Depending on the nature of the transaction, this may result in derecognition of the assets in their entirety,
partial derecognition or no derecognition of the assets subject to the transfer.
Full derecognition only occurs when the Group transfers both its contractual right to receive cash flows from the financial assets (or retains the
contractual rights to receive the cash flows, but assumes a contractual obligation to pay the cash flows to another party without material delay or
reinvestment) and substantially all the risks and rewards of ownership, including credit risk, prepayment risk and interest rate risk. When an asset
is transferred, in some circumstances, the Group may retain an interest in it (continuing involvement) requiring the Group to repurchase it in
certain circumstances for other than its fair value on that date.
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