Barclays 2013 Annual Report Download - page 371

Note 45: Financial risks, liquidity and capital management
To improve transparency and ease of reference, by concentrating related information in one place, and to reduce duplication, disclosures required
under IFRS relating to financial risks and capital resources have been included within the Risk management and governance section as follows:
 credit risk, on pages 142 to 189;
 market risk, on pages 190 to 198;
 capital resources, on pages 199 to 207; and
 liquidity risk, on pages 208 to 224.
Note 46: Transition Notes – Changes in accounting policies, comparability and other adjustments
IAS 19 (revised) Employee Benefits
In June 2011, the IASB issued revisions to IAS 19 Employee Benefits (IAS 19R or the revised standard). During 2013, Barclays adopted IAS 19R
retrospectively in accordance with the transitional provisions set out in the standard. The revised standard introduces changes to the recognition,
measurement, presentation and disclosure of post-employment benefits. IAS 19R eliminates the “corridor method”, under which the recognition
of actuarial gains and losses was deferred. Instead, the full defined benefit obligation net of plan assets is now recorded on the balance sheet, with
changes resulting from remeasurements recognised immediately in other comprehensive income. The measurement of the defined benefit
obligation takes into account risk sharing features, such as those within our Swiss pension plan. In addition, IAS 19R requires net interest expense
/ income to be calculated as the product of the net defined benefit liability / asset and the discount rate as determined at the beginning of the
year. The effect of this is to remove the previous concept of recognising an expected return on plan assets.
IFRS 10 Consolidation of Financial Statements
In May 2011, the IASB issued IFRS 10 Consolidation of Financial Statements. IFRS 10 establishes principles for the presentation and preparation of
consolidated financial statements when an entity controls one or more other entities. IFRS 10 replaces the consolidation requirements in SIC-12
Consolidation—Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements. IFRS 10 builds on existing principles by
identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements
of the parent company.
The implementation of IFRS 10 resulted in the Group consolidating some entities that were previously not consolidated and deconsolidating some
entities that were previously consolidated, principally impacting the consolidation of entities in the Investment Bank with credit market exposures.
142 entities were impacted by IFRS10 and were largely within Investment Bank and Wealth divisions. 79 entities were consolidated while 63
entities were deconsolidated.
Movement between the published and restated income statements for 31 December 2011
In the income statement for the year ending 2011, the adoption of the IAS 19 revised standard resulted in staff costs increasing by £109m, tax
decreasing by £26m and the profit before tax reducing by £83m. The movement in the staff cost relates to the replacement of expected return on
assets with net interest income/expense using the scheme discount rate resulting in further expense of £164m. This is partially offset by
amortisation of unrecognised losses £55m no longer being recognised due to the removal of the corridor approach, with all actuarial losses
recognised immediately on the balance sheet.
In addition, the adoption of the IAS 19 revised standard resulted in the basic earnings per share decreasing 0.6p from 23.5p to 22.9p and the
diluted earnings per share decreasing 0.7p from 22.6p to 21.9p.
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