Barclays 2013 Annual Report Download - page 326

Financial instruments held at amortised cost
The notes included in this section focus on assets that are held at amortised cost arising from the Group’s
retail and wholesale lending including loans and advances, finance leases, repurchase and reverse repurchase
agreements and similar secured lending. Detail regarding the Group’s capital and liquidity position can be found
on pages 199 to 224.
Note 20: Loans and advances to banks and customers
Accounting for financial instruments held at amortised cost
Loans and advances to customers and banks, customer accounts, debt securities and most financial liabilities, are held at amortised cost. That
is, the initial fair value (which is normally the amount advanced or borrowed) is adjusted for repayments and the amortisation of coupon, fees
and expenses to represent the effective interest rate of the asset or liability.
As at 31 December 2013 2013
£m
2012
£m
Gross loans and advances to banks 37,863 40,503
Less: allowance for impairment (10) (41)
Loans and advances to banks 37,853 40,462
Gross loans and advances to customers 437,659 431,664
Less: allowance for impairment (7,248) (7,758)
Loans and advances to customers 430,411 423,906
Further information on the Group’s loans and advances to banks and customers and impairment allowances are included on pages 142 to 189.
Note 21: Finance leases
Accounting for finance leases
The Group applies IAS 17 Leases in accounting for finance leases, both where it is the lessor or the lessee. A finance lease is a lease which
confers substantially all the risks and rewards of the leased assets on the lessee. Where the Group is the lessor, the leased asset is not held on
the balance sheet; instead a finance lease receivable is recognised representing the minimum lease payments receivable under the terms of the
lease, discounted at the rate of interest implicit in the lease. Where the Group is the lessee, the leased asset is recognised in property, plant and
equipment and a finance lease liability is recognised, representing the minimum lease payments payable under the lease, discounted at the rate
of interest implicit in the lease.
Interest income or expense is recognised in interest receivable or payable, allocated to accounting periods to reflect a constant periodic rate
of return.
Finance lease receivables
Finance lease receivables are included within loans and advances to customers. The Group specialises in asset-based lending and works with a
broad range of international technology, industrial equipment and commercial companies to provide customised finance programmes to assist
manufacturers, dealers and distributors of assets.
2013 2012
Gross
investment
in finance
lease
receivables
£m
Future
finance
income
£m
Present
value of
minimum
lease
payments
receivable
£m
Un-
guaranteed
residual
values
£m
Gross
investment
in finance
lease
receivables
£m
Future
finance
income
£m
Present
value of
minimum
lease
payments
receivable
£m
Un-
guaranteed
residual
values
£m
Not more than one year 2,004 (286) 1,718 93 2,363 (329) 2,034 80
Over one year but not more than five years 4,308 (662) 3,646 268 5,055 (749) 4,306 105
Over five years 539 (76) 463 85 617 (120) 497 318
Total 6,851 (1,024) 5,827 446 8,035 (1,198) 6,837 503
The impairment allowance for uncollectable finance lease receivables amounted to £129m at 31 December 2013 (2012: £140m).
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324 Barclays PLC Annual Report 2013
Notes to the financial statements
For the year ended 31 December 2013 continued