Barclays 2011 Annual Report Download - page 206

For the year ended 31 December 2011
Notes to the financial statements
1 Significant accounting policies
This section describes Barclays’ significant accounting policies and critical accounting estimates
that relate to the financial statements and notes as a whole. If an accounting policy or a critical
accounting estimate relates to a specific note, the applicable accounting policy and/or critical
accounting estimate is contained within the relevant note.
1. Reporting entity
These financial statements are prepared for Barclays PLC and its subsidiaries (the Barclays PLC Group or the Group) under Section 399 of the
Companies Act 2006. The Group is a major global financial services provider engaged in retail banking, credit cards, wholesale banking, investment
banking, wealth management and investment management services. In addition, individual financial statements have been presented for the
holding company, Barclays PLC (the Company). Barclays PLC is a public limited company, incorporated and domiciled in England and Wales having a
registered office in England and is the holding company of the Group.
2. Compliance with International Financial Reporting Standards
The consolidated financial statements of the Group, and the individual financial statements of Barclays PLC, have been prepared in accordance with
International Financial Reporting Standards (IFRS) and interpretations (IFRICs) issued by the Interpretations Committee, as published by the
International Accounting Standards Board (IASB). They are also in accordance with IFRS and IFRIC interpretations endorsed by the European Union.
The principal accounting policies applied in the preparation of the consolidated and individual financial statements are set out below, and in the
relevant notes to the financial statements. These policies have been consistently applied. There were no changes in accounting policy in the year.
3. Basis of preparation
The consolidated and individual financial statements have been prepared under the historical cost convention modified to include the fair valuation
of investment property and particular financial instruments to the extent required or permitted under IFRS as set out in the relevant accounting
policies. They are stated in millions of pounds Sterling (£m), the functional currency of Barclays PLC.
4. Accounting policies
Barclays prepares financial statements in accordance with IFRS. The Group’s significant accounting policies relating to specific financial statement
items, together with a description of the accounting estimates and judgements that were critical to preparing them, are set out under the relevant
notes. Accounting policies that affect the financial statements as a whole are set out below.
(i) Consolidation
Barclays applies IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation – Special Purpose Entities (SPEs).
The consolidated financial statements combine the financial statements of Barclays PLC and all its subsidiaries. Subsidiaries are entities over which it
has control of the financial and operating policies through its holdings of voting shares and SPEs, which are consolidated when the substance of the
relationship between the Group and the entity indicates control. The control assessment for special purpose entities includes an assessment of the
Group’s exposure to the risks and benefits of the entity. The consolidation of SPEs is considered at inception, based on the arrangements in place
and the assessed risk exposures at that time. The initial consolidation analysis is revisited at a later date if:
– the Group acquires additional interests in the entity;
– the contractual arrangements of the entity are amended such that the relative exposures to risks and rewards change; and
– the Group acquires control over the main operating and financial decisions of the entity.
Intra-group transactions and balances are eliminated on consolidation and consistent accounting policies are used throughout the Group for the
purposes of the consolidation.
Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control has already been obtained and
they do not result in loss of control.
Details of the principal subsidiaries are given in Note 40.
204 Barclays PLC Annual Report 2011 www.barclays.com/annualreport