Barclays 2004 Annual Report Download - page 208

Notes to the accounts
For the year ended 31st December 2004
52 Differences between UK GAAP and US GAAP accounting principles (continued)
(b) Intangible assets
Core Purchased Licences Merchant
deposit Customer credit card and other credit card
intangible Brand lists relationship contracts partnerships Software 2004
£m £m £m £m £m £m £m £m
Cost or valuation
At beginning of year 521 33 184 112 19 – 12 881
Additions – – – 22 1 37 – 60
Exchange/other – – (5) – – – – (5)
Cost carried forward 521 33 179 134 20 37 12 936
Accumulated amortisation and impairment
At beginning of year 211 9 55 39 1 – 315
Current year charge 75 20 17 22 5 – 4 143
Exchange/other – – (4) – – – – (4)
Amortisation carried forward 286 29 68 61 6 – 4 454
Net book value 2004 235 4 111 73 14 37 8 482
Weighted average amortisation period for
additions (months) 120 45 60
The amortisation expense for the net carrying amount of intangible assets is estimated to be £134m in 2005, £131m in 2006, £95m in 2007,
£33m in 2008 and £28m in 2009.
(c) Pensions and post-retirement benefits
The disclosures below reflect the amendments to the requirements of SFAS 87 and SFAS 106 arising from SFAS 132 (revised 2003) ‘Employers’
Disclosures about Pensions and Other Post-retirement Benefits’.
The excess of pension plan assets over the projected benefit obligation, as at the transition date, was recognised as a reduction of pension
expense on a prospective basis over approximately 15 years, which ended in 2003.
The provisions of US GAAP have been applied to the main UK pension scheme, the UK Retirement Fund (UKRF) based on a valuation date of
30th September 2004. Consequently the £500m contribution made to the UKRF in December 2003 is included in the US GAAP analysis of the
plan assets and the £250m contribution made to the UKRF in December 2004 is excluded from the US GAAP analysis of plan assets. The following
analysis relates to the UKRF (1964 Pension Scheme, Retirement Investment Scheme, Pension Investment Plan, afterwork and the Career Average
Section) which makes up approximately 95% of all the Group’s schemes in terms of assets and actuarial liabilities.
Under the terms of an agreement between the Bank, the Trustees of the Woolwich Pension Fund (WPF) and the Trustees of the UKRF, the final
transfer of the liabilities of the WPF into the UKRF was made on 1st May 2004, following which the remaining £56.2m assets in the WPF were
transferred to the UKRF and a special contribution of £2m was paid into the UKRF.
The components of the pension and post-retirements expense (where an actuarial basis is appropriate) which arise under US GAAP are as follows:
2004 2003 2002
Post- Post- Post-
retirement retirement retirement
Pensions benefits Pensions benefits Pensions benefits
£m £m £m £m £m £m
Components of net periodic benefit cost
Service cost 319 1 292 1 275 1
Interest cost 692 5 630 5 624 5
Expected return on plan assets (738) – (664) – (807) –
Amortisation of transition adjustment ––(12) 1 (23) 1
Curtailment and termination benefits ––––762
Recognised net actuarial deficit 27 2 33 2 – 1
Net periodic benefit cost 300 8 279 9 145 10
For measurement purposes, the calculation assumes a 10.6% and 5% annual rate of increase in the per capita cost of covered medical benefits
and dental benefits respectively for pensioners in the US at the end of the 2004 year (12% and 5% at the end of 2003). The rate for 2005 is
assumed to be 10% and to decrease 1% annually to 5% in 2010 and remain at that level thereafter.
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