Barclays 2005 Annual Report Download - page 263

Barclays PLC
Annual Report 2005 261
3.5
62 First-time adoption of International Financial Reporting Standards (IFRS) (continued)
Differences between UK GAAP and IFRS
Effects of the application of IAS 32, IAS 39 and IFRS 4
UK GAAP IFRS
(u) Derecognition and financial liabilities
Under FRS 5, a liability is derecognised if an entity’s obligation to
transfer economic benefits is satisfied, removed or is no longer likely to
occur.
A financial liability is extinguished when and only when the obligation
is discharged, cancelled or expires. A financial asset can be removed
from the balance sheet only where the derecognition conditions have
been met, including a requirement to continue to recognise financial
assets only to the extent of any continuing involvement in them
after the transfer.
The application of IFRS has resulted in certain customer accounts being
remeasured as at 1st January 2005 to reflect the entire legal obligation.
In addition, certain customer loyalty provisions, which meet the
definition of financial liabilities, have been reclassified from provisions to
financial liabilities and remeasured accordingly.
Certain securitisation structures that qualified for linked presentation
under UK GAAP in 2004, and which were presented on a gross basis
under IFRS in 2004, qualified for derecognition on a ‘continuing
involvement’ basis under IFRS from 1st January 2005 and have been
substantially removed from the balance sheet from that date.