Barclays 2006 Annual Report Download - page 261

Barclays PLC
Annual Report 2006 257
Financial statements
3
60 Differences between IFRS and US GAAP accounting principles (continued)
SFAS 156: Accounting for Servicing of Financial Assets
Statement of Financial Accounting Standards No. 156 (SFAS 156) was issued in March 2006. SFAS 156 amends SFAS 140 to require that all separately
recognised servicing assets and servicing liabilities be initially measured at fair value, if practicable. SFAS 156 permits an entity to choose the
subsequent measurement of separately recognised servicing assets and servicing liabilities either using amortisation method or fair value method.
SFAS 156 also permits, at its initial adoption, a one-time reclassification of available for sale securities to trading securities by entities with recognised
servicing rights, without impacting the treatment of other available for sale securities under SFAS 115, provided that the available for sale securities
are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects
to subsequently measure at fair value.
The statement is effective as of the beginning of its first fiscal year beginning after 15th September 2006. The impact of SFAS 156 on the Group’s
US GAAP position is expected to be immaterial.
FIN 48: Accounting for Uncertainty in Income Taxes
FASB Interpretation No. 48 (FIN 48) was issued in June 2006. This Interpretation prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In recognising a tax position, the
enterprise determines whether it is more likely than not that a tax position will be sustained upon examination. A tax position that is recognised is
then measured at the largest amount of benefit that is greater than 50 percent likely of being realised upon ultimate settlement.
This Interpretation is effective for fiscal years beginning after 15th December 2006. The impact of the interpretation on the Group’s US GAAP
position is expected to be immaterial.
SFAS 157: Fair Value Measurements
Statement of Financial Accounting Standards No. 157 (SFAS 157) defines fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (US GAAP) and expands disclosures about fair value measurements. While this SFAS 157 does not require any new
fair value measurements, it is possible that the application of SFAS 157 will change current practice and introduce new differences between IFRS and
US GAAP. SFAS 157 is effective for financial statements issued for fiscal years beginning after 15th November 2007. Barclays is assessing the impact
of the standard on the Group’s US GAAP position.
SFAS 159: The Fair Value Option for Financial Assets and Liabilities
Statement of Financial Accounting Standards No. 159 (SFAS 159) was issued on 15th February 2006 and provides companies with an option to
report selected financial assets and liabilities at fair value.
SFAS 159 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of assets and liabilities. The standard also requires entities to display the fair value of those assets and
liabilities for which the company has chosen to use fair value on the face of the balance sheet. The new statement does not eliminate disclosure
requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157
and SFAS 107.
The statement is effective as of the beginning of an entity’s first fiscal year beginning after 15th November 2007. Barclays is assessing the impact of
the standard on the Group’s US GAAP position.