Barclays 2005 Annual Report Download - page 67

Risk management
Allowances for Impairment
Total impairment allowances at the end of 2005 increased by 27%
(£739m) to £3,450m over the provisions balances for the prior year
(£2,711m). Of this increase, £545m is in regard to the acquisition
of Absa. Furthermore, due to the adoption of IAS 32 and IAS 39
on 1st January and the consequent restatement of the impairment
allowance, the period end value at 31st December 2004 does not
correspond to the opening value at the beginning of 2005 which was
restated as £2,637m. Excluding Absa, the increase from the opening
to closing balances in 2005 was 10%. (See Table 22 on page 89).
An analysis of all the movements in the impairment balances is shown
in the following chart.
(See also Table 24 on page 89.)
Notes
(a) Represents the increase in the allowance for the period following the Group’s assessment of the recoverability of its loans and receivables, in accordance with IAS 39.
(b) Represents allowances brought in from new subsidiaries acquired in the year including £545m from Absa.
(c) Represents recoveries of amounts previously written off.
(d) Includes unwind of discount and other adjustments.
(e) Includes the effects of IAS 32, IAS 39 and IFRS 4 restatement of 1st January 2005 opening impairment balance.
(f) Balances are written off when it is considered that there is no possibility of making further recoveries.
Movements
5,000
Movements in allowances for impairment on loans and advances £m
3,000
2,500
2,000
3,500
4,500
4,000
1,500
1,000
500
0
Balance at
31st Dec 04
2,711
Impairment
charged against
profit(a)
Recoveries(c) Adjustments(d) IFRS
Adjustments(e)
1,574
Acquisitions
and
Disposals(b)
Amounts
written off(f )
Balance at
31st Dec 05
3,450
(1,587)
49 (74)
222
555
Barclays PLC
Annual Report 2005 65
2.8