Aviva 2014 Annual Report Download - page 144

Aviva plc Annual report and accounts 2014
Notes to the consolidated financial statements continued
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4 – Subsidiaries continued
(vi) Spain – long-term business
On 19 September 2014 Aviva announced the sale of its 50% holding in CXG Aviva Corporacion Caixa Galicia de Seguros y
Reaseguros, S.A. (“CxG”) a Spanish life assurance company to NCG Corporacion Industrial S.L. (“NCG Banco”) following a
decision by the Spanish Arbitration Tribunal which concluded legal proceedings between Aviva and NCG Banco.
On 11 December 2014 the Group transferred its entire holding in CxG for cash consideration of £221 million resulting in a net
profit on disposal of £132 million, calculated as follows:
2014
£m
Assets
Goodwill 56
Intangible assets 3
Financial investments 806
Receivables and other assets 5
Prepayments and accrued income 13
Cash and cash equivalents 23
Total assets 906
Liabilities
Insurance liabilities 718
Payables and other financial liabilities 24
Other liabilities 7
Total liabilities 749
Net assets 157
Non-controlling interests before disposal (51)
Group's share of net assets disposed of 106
Cash consideration received 221
Less: transaction costs attributable to Aviva (1)
Net cash consideration 220
Currency translation reserve recycled to the income statement 18
Profit on disposal 132
(vii) Turkey general insurance
In the second half of 2013 management committed to sell the Turkey general insurance subsidiary Aviva Sigorta S.A. (“Turkey GI”).
At 31 December 2013 the business was remeasured to fair value based on an expected sales price less costs to sell of £2 million
resulting in a loss on remeasurement of £9 million in FY13 following its classification as held for sale.
In 2014 the underlying carrying value decreased from £11 million to £(2) million. On 18 December 2014 Aviva completed the
sale of Turkey GI resulting in a loss on sale of £17 million after transaction costs and post completion adjustments.
The net loss recognised within “Profit on the disposal and remeasurement of subsidiaries, joint ventures and associates” in
2014 is calculated as follows:
2014
£m
Loss on sale (17)
Reversal of 2013 impairment 9
Currency translation reserve recycled to the income statement (8)
Net loss on disposal (16)
(viii) Discontinued operations – US Life
On 21 December 2012, the Group announced that it had agreed to sell US Life for consideration of £1.0 billion including the
shareholder loan. Following classification as held for sale, US Life was remeasured to fair value less costs to sell in 2012 resulting in
an impairment loss of £2,359 million recognised as a loss on remeasurement of subsidiaries.
The sale of US Life completed on 2 October 2013 and the transaction proceeds received were based on the estimated earnings
and other improvements in statutory surplus over the period from 30 June 2012 to 30 September 2013. The final purchase price
was subject to customary completion adjustments. A profit on disposal of £808 million was recorded in 2013, reflecting
management’s best estimate of the completion adjustments as of 31 December 2013.
In 2014, the Group paid a settlement of £20 million related to the purchase price adjustment. The settlement and the
aggregate development of other provisions related to the discontinued operations in 2014 resulted in a net £58 million gain which
has been presented as profit on disposal of discontinued operations.
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