Barclays 2012 Annual Report Download - page 249

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8 Administration and general expenses
2012
£m
2011
£m
2010
£m
Property and equipment 1,656 1,763 1,813
Outsourcing and professional services 2,179 1,869 1,705
Operating lease rentals 622 659 637
Marketing, advertising and sponsorship 572 585 631
Communications, subscriptions, publications and stationery 727 740 750
Travel and accommodation 324 328 358
Other administration and general expenses 546 400 566
Impairment of property, equipment and intangible assets (excluding goodwill) 17 12 125
Administration and general expenses 6,643 6,356 6,585
2012
Administration and general expenses increased £287m to £6,643m, primarily due to the £290m penalty relating to the industry wide investigation
into the setting of interbank offered rates. An increase in expenses relating to the Financial Services Compensation Scheme were offset by a
reduction in the underlying cost base reflecting the impact of the Group-wide cost reduction initiative.
2011
Administration and general expenses decreased £229m to £6,356m, principally reflecting the benefits of restructuring and the non-recurrence of
the one-off provision in respect of the resolution of a review of Barclays compliance with US economic sanctions that occurred in 2010. These
reductions have been offset by an increase in outsourcing and professional services as a result of Barclaycard acquisitions and restructuring
charges.
9 Profit on disposal of subsidiaries, associates and joint ventures
During the year, the profit on disposal of subsidiaries, associates and joint ventures was £28m (2011: loss of £94m), principally relating to the
disposal of the Group’s 51% stake in Iveco Finance in May 2012. The Iveco gain on disposal of £21m relates to accumulated foreign exchange
gains that were previously recognised directly in equity and were recycled through the income statement within Head Office and Other
Operations.
10 Tax
Accounting for income taxes
Barclays applies IAS 12 Income Taxes in accounting for taxes on income. Income tax payable on taxable profits (‘Current Tax’) is recognised as
an expense in the period in which the profits arise. Withholding taxes are also treated as income taxes. Income tax recoverable on tax allowable
losses is recognised as a current tax asset only to the extent that it is regarded as recoverable by offset against taxable profits arising in the
current or prior period. Current tax is measured using tax rates and tax laws that have been enacted or substantively enacted at the balance
sheet date.
Deferred tax is provided in full, using the liability method, on temporary differences arising from the differences between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates and legislation
enacted or substantively enacted by the balance sheet date which are expected to apply when the deferred tax asset is realised or the deferred
tax liability is settled. Deferred tax assets and liabilities are only offset when there is both a legal right to set-off and an intention to settle on a
net basis.
2012
£m
2011
£m
2010
£m
Current tax charge
Current year 568 2,690 1,413
Adjustment for prior years 207 (61) (20)
775 2,629 1,393
Deferred tax (credit)/charge
Current year (206) (631) 118
Adjustment for prior years (87) (70) 5
(293) (701) 123
Tax charge 482 1,928 1,516
Tax relating to each component of other comprehensive income can be found in the consolidated statement of comprehensive income, which
includes within Other a tax credit of £95m (2011: £74m charge; 2010: £59m credit), principally relating to share based payments.
barclays.com/annualreport Barclays PLC Annual Report 2012 I 247