Barclays 2012 Annual Report Download - page 259

The strategic report Governance Risk review Financial review Financial statements Risk management Shareholder information
16 Available for sale investments
Accounting for available for sale investments
Available for sale investments are held at fair value with gains and losses being included in other comprehensive income. The Group uses this
classification for assets that are not derivatives and are not held for trading purposes or otherwise designated at fair value through profit or
loss, or at amortised cost. Dividends and interest (calculated using the effective interest method) are recognised in the income statement in net
interest income (Note 3) or, net investment income (Note 6). On disposal, the cumulative gain or loss recognised in other comprehensive
income is also included in net investment income.
2012
£m
2011
£m
Debt securities and other eligible bills 74,677 63,610
Equity securities 432 4,881
Available for sale investments 75,109 68,491
Critical accounting estimates and judgements
Approximately $4.5bn (£2.8bn) of the assets acquired as part of the 2008 acquisition of the North American business of Lehman Brothers had not
been received by 31 December 2012. Approximately $3.0bn (£1.9bn) of this amount was recognised as part of the acquisition accounting and is
included as an available for sale investment on the balance sheet. As discussed in Note 29, Barclays entitlement to these assets is the subject of
legal proceedings between the SIPA Trustee for Lehman Brothers Inc. and Barclays. As such, there continues to be significant judgement involved
in the valuation of this asset and uncertainty relating to the outcome of ongoing appeals. The Group takes the view that the effective provision of
US$1.5bn (£0.9bn) that is reflected in its estimate of fair value is appropriate. The valuation of this asset will be kept under review as legal
proceedings progress.
17 Financial liabilities designated at fair value
Accounting for liabilities designated at fair value through profit and loss
In accordance with IAS 39, financial liabilities may be designated at fair value, with gains and losses taken to the income statement within net
trading income (Note 5) and net investment income (Note 6). The Group has the ability to do this when holding the instruments at fair value
reduces an accounting mismatch (caused by an offsetting liability or asset being held at fair value), is managed by the Group on the basis of its
fair value, or includes terms that have substantive derivative characteristics (Note 15).
2012 2011
Fair value
£m
Contractual
amount due
on maturity
£m
Fair value
£m
Contractual
amount due
on maturity
£m
Debt securities 58,169 60,045 66,565 70,787
Deposits 11,930 13,583 10,755 11,422
Liabilities to customers under investment contracts 1,494 – 1,681 –
Other financial liabilities 6,687 6,705 8,996 9,561
Financial liabilities designated at fair value 78,280 80,333 87,997 91,770
The cumulative own credit net loss recognised is £979m at 31 December 2012 (2011: £3,600m gain).
barclays.com/annualreport Barclays PLC Annual Report 2012 I 257