Barclays 2005 Annual Report Download - page 264

Barclays PLC
Annual Report 2005
262
Notes to the accounts
For the year ended 31st December 2005
63 Differences between IFRS and US GAAP accounting principles
The Group has applied IFRS from 1st January 2004, with the exception of the standards relating to financial instruments and insurance contracts
which are applied only from 1st January 2005. Therefore the impacts of adopting IAS 32, IAS 39 and IFRS 4 are not included in the IFRS 2004
comparatives and financial instruments and insurance contracts are accounted for under UK GAAP.
Significant differences between IFRS and US GAAP that are applicable to Barclays are summarised below.
IFRS US GAAP
Goodwill
From 1st January 2004, goodwill recognised in the IFRS balance sheet is
not amortised but tested annually for impairment.
Goodwill previously written off to reserves in accordance with UK GAAP
has not been reinstated on the balance sheet.
Intangible assets other than goodwill
For acquisitions arising after 1st January 2004, intangible assets are
recognised as an asset apart from goodwill in accordance with IFRS 3.
Pensions
For defined benefit schemes, an actuarial measurement of the scheme
obligation and the fair value of the plan assets is made at the end of
each year and the difference between the fair value of the plan assets
and the present value of the defined benefit obligation at the balance
sheet date, together with adjustments for any unrecognised actuarial
losses and past service cost, is recognised as a liability in the balance
sheet.
Pension assets and liabilities existing at 1st January 2004 were
recognised in full.
Post-retirement benefits
Post-retirement benefits are assessed actuarially on a similar basis to
pension liabilities under IAS 19. From 1st January 2004 these benefits
are accrued as a liability in the financial statements over the period
of employment.
Compensation arrangements
Non-share-based compensation arrangements awarded to employees
where no performance criteria, other than continued service, are
required to be met are accrued fully on the date of the grant.
Employer payroll taxes on employee stock-based compensation are
recognised over the vesting period.
The disposal of shares from the Group to a minority shareholder, for
certain share schemes, is recorded in the income statement.
Life assurance
Life assurance products that are not classified as insurance contracts
are accounted for under IAS 39. Products with sufficient insurance risk
to be classified as insurance contracts are accounted for under the
Modified Statutory Solvency Basis or similar bases.
Revaluation of property
The carrying amount of property, plant and equipment included in the
UK GAAP balance at 31st December 2003 has been carried forward into
the IFRS balance sheet at 1st January 2004 without adjustment as
deemed cost. This results in property being carried either at original
cost or at a subsequent valuation less related depreciation, calculated
on the revalued amount where applicable.
From 1st January 2002, US GAAP required goodwill not to be amortised
but tested annually for impairment.
Goodwill previously written off to reserves in accordance with UK GAAP
is recorded on the balance sheet.
From 1st January 2002, intangible assets are recognised as an asset
apart from goodwill in accordance with SFAS 141.
For defined benefit schemes, the same actuarial approach used under
IFRS is used under SFAS 87. Differences arise in certain assumptions
and in the measurement and adoption dates used for calculation
purposes.
Under SFAS 106, there are certain differences in the assumptions,
measurement and the adoption dates used for calculation purposes.
Non-share-based compensation arrangements awarded to employees
where no performance criteria, other than continued service, are
required to be met are accrued evenly over the period of the grant to
date of payout.
Employer payroll taxes on employee stock-based compensation are
recognised on exercise date.
The disposal of shares from the Group to a minority shareholder, for
certain share schemes, is recorded directly in equity.
Under US GAAP, life assurance products are accounted for under SFAS
60, SFAS 97 and SOP 03-01, depending on the nature of the underlying
product and the level of insurance risk. This gives rise to measurement
and classification differences.
Revaluations of property are not permitted under US GAAP.