Aviva 2009 Annual Report Download - page 228

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Aviva plc Notes to the consolidated financial statements continued
Annual Report and Accounts 2009
44 – Special bonus and reattribution of the inherited estate continued
Initial impact
The initial impact of the reorganisation on the IFRS income statement and balance sheet at 1 October 2009 was:
Impact
Note £m
Change in unallocated divisible surplus
Release of unallocated divisible surplus (a) 881
Other expenses
Policyholder incentive payments (b) (471)
Project costs (c) (208)
Tax (d) (207)
Loss after tax (5)
Impact
Note £m
Cash and cash equivalents (b) (450)
Prepayments (c) (208)
Total assets (658)
Equity (5)
Gross insurance liabilities (b) 21
Unallocated divisible surplus (a) (881)
Tax liabilities (d) 207
Total equity and liabilities (658)
Notes:
(a)The unallocated divisible surplus transferred to the NWPSF, in proportion to the electing policies, has been allocated to shareholders and released. The remaining UDS, transferred to the OWPSF
in proportion to the non-electing policies, has not been released and remains unallocated.
(b)Policyholder incentive payments total £471 million. Payments totalling £450 million were paid in cash and the remaining payments of £21 million were added to the value of certain policies
in the form of additional benefits.
(c) During the development stage of the scheme eligible costs were capitalised as a prepayment. As the benefit of the scheme has now been realised, these costs have been charged to the
Income Statement.
(d)A deferred tax liability has been recognised in accordance with IAS 12 on the temporary difference between the carrying value of the reattributed estate for tax and IFRS purposes.
The initial impact of the reorganisation on profit before tax was £202 million, of which a loss of £5 million is recognised in
operating profit, reflecting the value derived from the reorganisation. The remaining £207 million is recognised outside operating
profit, off-setting the shareholder tax attributable to the transaction.
Ongoing impact
The reattribution has an ongoing impact arising from profits generated in the NWPSF that are attributable to shareholders.
Included within profit before tax for the year of £2,022 million is £51 million that has been recognised as profit as a result of the
reattribution of the inherited estate which comprises £56 million relating to the ongoing impact offset by a £5 million charge from
the initial impact of the reattribution. Previously this profit would have been transferred to the unallocated distributable surplus.