Aviva 2013 Annual Report Download - page 235

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
233
Notes to the consolidated financial statements continued
60 – Financial assets and liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements
Financial assets and liabilities are offset in the statement of financial position when the Group has a legally enforceable right
to offset and has the intention to settle the asset and liability on a net basis, or to realise the asset and settle the liability
simultaneously.
Aviva mitigates credit risk in derivative contracts by entering into collateral agreements, where practical, and in ISDA master
netting agreements for each of the legal entities to facilitate Aviva’s right to offset credit risk exposure. The credit support
agreement will normally dictate the threshold over which collateral needs to be pledged by Aviva or its counterparty.
Transactions requiring Aviva or its counterparty to post collateral are typically the result of over-the-counter derivative trades,
comprised mostly of interest rate swaps, currency swaps and credit default swaps. These transactions are conducted under terms
that are usual and customary to standard long-term borrowing, derivative, securities lending and securities borrowing activities.
The derivative assets and liabilities in the table below are made up of the contracts described in detail in note 59.
Reverse repurchase arrangements are instances in which cash has been received as collateral for securities. Those amounts
included as securities lending in the tables below are securities which have been obtained as collateral in arrangements which
transfer economic risk and reward, and therefore are recognised as assets by Aviva. In both of these cases, the collateral received
is over 100%, however, in accordance with IFRS 7, the amount reported in the tables below as collateral is limited to the amount
reported on the balance sheet.
The amounts in the other investments lines represent offsetting collateral arrangements related to miscellaneous asset lending
and unit trust arrangements.
Related amounts not set
off in the statement of
financial position
2013
Gross
amounts of
recognised
financial
assets
£m
Gross
amounts of
recognised
financial
liabilities set
off in the
statement
of financial
position
£m
Net
amounts of
financial
assets
presented
in the
statement
of financial
position
£m
Financial
instruments
£m
Collateral
received
£m
Net amount
£m
Financial assets
Derivatives 2,099 (1,041) 1,058 (36) (65) 957
Cash held as collateral on reverse repurchase and similar arrangements 4,543 — 4,543 — (4,543) —
Securities Lending 666 (111) 555 — (552) 3
Other investments 532 — 532 — (301) 231
Total 7,840 (1,152) 6,688 (36) (5,461) 1,191
Related amounts not set
off in the statement of
financial position
2013
Gross
amounts of
recognised
financial
liabilities
£m
Gross
amounts of
recognised
financial
assets set
off in the
statement
of financial
position
£m
Net
amounts of
financial
liabilities
presented
in the
statement
of financial
position
£m
Financial
instruments
£m
Collateral
pledged
£m
Net amount
£m
Financial liabilities
Derivatives 3,734 (2,546) 1,188 (36) (152) 1,000
Securities Lending 91 (91) — — — —
Total 3,825 (2,637) (1,188) (36) (152) 1,000