HSBC 2012 Annual Report Download - page 452

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
17 – Reclassification of financial assets / 18 – Financial assets designated at fair value
450
Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet
At 31 December 2012 At 31 December 2011
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Assets
Loans and advances to HSBC undertakings ................................ 41,675 42,843 28,048 27,562
Liabilities
Amounts owed to HSBC undertakings ........................................ 12,856 13,133 2,479 2,485
Debt securities in issue ................................................................. 2,691 3,188 2,613 2,922
Subordinated liabilities ................................................................. 11,907 14,865 12,450 13,052
17 Reclassification of financial assets
In 2008, HSBC reclassified US$15.3bn and US$2.6bn of financial assets from the held-for-trading category to the
loans and receivables and available-for-sale classifications, respectively, as permitted by the relevant amendment to
IAS 39 and explained in Note 2(e) on the Financial Statements. No further reclassifications were undertaken.
Reclassification of HSBC’s financial assets
At 31 December 2012 At 31 December 2011
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Reclassification to loans and receivables ..................................... 6,378 5,616 7,867 6,651
Reclassification to available for sale ............................................ 12 12 33 33
6,390 5,628 7,900 6,684
The following table shows the fair value gains and losses, income and expense recognised in the income statement in
respect of reclassified assets and the gains and losses that would have been recognised if no reclassification had taken
place:
Effect of reclassifying and not reclassifying financial assets
2012 2011 2010
US$m US$m US$m
Reclassification to loans and receivables
Recorded in the income statement1 .......................................................................... 179 318 610
Assuming no reclassification2 ................................................................................. 653 317 1,260
Net income statement effect of reclassification ......................................................... (474) 1 (650)
Reclassification to available for sale
Recorded in the income statement1 .......................................................................... – 1 56
Assuming no reclassification2 ................................................................................. 1 (2) 59
Net income statement effect of reclassification ......................................................... (1) 3 (3)
1 ‘Income and expense’ recorded in the income statement include the accrual of the effective interest rate and, for 2012, includes US$84m
in respect of impairment (2011: US$69m; 2010: US$6m).
2 Effect on the income statement during the year had the reclassification not occurred.