Barclays 2008 Annual Report Download - page 252

Notes to the accounts
For the year ended 31st December 2008
39 Acquisitions (continued)
Certain assets were received subsequent to the acquisition date, since it was first necessary to agree their status as assets of the Group with the relevant
regulators, custodians, trustees, exchanges and bankruptcy courts. Such assets were initially classified within loans and advances. Once they were
received, the related receivable was derecognised and the resulting asset recognised within the appropriate balance sheet category. In the table such
assets are classified accordingly.
The initial accounting for the acquisition has been determined only provisionally. Any revisions to fair values that result from the conclusion of the
acquisition process with respect to assets not yet received by the Group will be recognised as an adjustment to the initial accounting. Any such revisions
must be effected within 12 months of the acquisition date and would result in a restatement of the 2008 income statement and balance sheet.
The excess of the fair value of net assets acquired over consideration paid resulted in £2,262m of gain on acquisition.
It is impracticable to disclose the profit or loss of the acquired Lehman Brothers North American businesses since the acquisition date. The acquired
business has been integrated into the corresponding existing business lines and there is no reliable basis for allocating post-acquisition results between
the acquirer and the acquiree. Similarly, it is impracticable to disclose the revenue and profit or loss of the combined entity as though the acquisition date
had been 1st January 2008. Only parts of Lehman Brothers US and Canadian businesses, and specified assets and liabilities, were acquired. There is no
reliable basis for identifying the proportion of the pre-acquisition results of Lehman Brothers that relates to the business acquired by the Group.
(b) Macquarie Bank Limited Italian residential mortgage businesses and Goldfish credit card UK businesses
On 6th November 2008, the Group purchased the Italian residential mortgage businesses of Macquarie Bank Limited.
On 31st March 2008, the Group completed the acquisition of Discover’s UK credit card businesses, Goldfish.
The assets and liabilities of Macquarie Bank Limited Italian residential mortgage businesses and Goldfish credit card UK businesses before and after the
acquisition, details of the purchase price and gains on acquisitions arising were as follows:
Macquarie Bank businesses Goldfish credit card UK businesses
Carrying Carrying
value pre- Fair value Fair value pre- Fair value Fair
acquisition adjustments values acquisition adjustments values
£m £m £m £m £m £m
Assets
Cash and balances at central banks 3–3172 – 172
Loans and advances to banks –––8–8
Loans and advances to customers 833 (20) 813 1,900 (34) 1,866
Other assets –––39 (1) 38
Intangible assets ––––32 32
Property, plant and equipment 1–139 1 40
Deferred tax asset ––––12 12
Total assets 837 (20) 817 2,158 10 2,168
Liabilities
Long- and short-term borrowings –––1,974 – 1,974
Other liabilities –––55 – 55
Deferred tax liabilities ––––99
Total liabilities –––2,029 92,038
Net assets acquired 837 (20) 817 129 1 130
Acquisition cost
Cash paid 765 35
Attributable costs –3
Total consideration 765 38
Gains on acquisitions 52 92
The contribution to the consolidated profit before tax of the acquired businesses in the table above for the period from the acquisition date to
31st December 2008 is £1m loss for Macquarie Bank Limited businesses and £40m profit for the Goldfish credit card UK businesses.
The excess remaining after the reassessment of the acquirees’ identifiable assets, liabilities and contingent liabilities which has been recognised within the
consolidated income statement as a gain on acquisition is £52m for Macquarie Bank Limited businesses and £92m for Goldfish credit card UK businesses.
250 Barclays PLC Annual Report 2008 |Find out more at www.barclays.com/annualreport08