Barclays 2013 Annual Report Download - page 305

Note 16: Available for sale financial assets
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.
2013
£m
2012
£m
Debt securities and other eligible bills 91,298 74,671
Equity securities 458 438
Available for sale investments 91,756 75,109
Critical accounting estimates and judgements
Approximately $4.3bn (£2.6bn) 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 2013. Approximately $2.7bn (£1.6bn) 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 30, 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
$1.6bn (£1.0bn) 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.
Note 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).
2013 2012
Fair value
£m
Contractual
amount due
on maturity
£m
Fair value
£m
Contractual
amount due
on maturity
£m
Debt securities 49,244 52,306 57,878 59,754
Deposits 8,071 9,161 11,411 13,064
Liabilities to customers under investment contracts 1,705 – 1,542 –
Repurchase agreements 5,306 5,331 6,020 6,038
Other financial liabilities 470 470 1,710 1,710
Financial liabilities designated at fair value 64,796 67,268 78,561 80,566
The cumulative own credit net loss recognised is £1,199m at 31 December 2013 (2012: £979m loss).
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