Barclays 2014 Annual Report Download - page 281

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16 Available for sale financial assets
Accounting for available for sale financial assets
Available for sale financial assets 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.
2014
£m
2013
£m
Debt securities and other eligible bills 85,539 91,298
Equity securities 527 458
Available for sale investments 86,066 91,756
Critical accounting estimates and judgements
Approximately $1.7bn (£1.1bn) 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 2014. Approximately $0.8bn (£0.5bn) of this amount has been recognised, as an available for sale asset. 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 $0.9bn (£0.6bn) 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), or is managed by the Group on the basis of
its fair value, or includes terms that have substantive derivative characteristics (Note 15).
The details on how the fair value amounts are arrived for financial liabilities designated at fair value are described in fair value of assets and
liabilities (Note 18).
2014 2013
Fair value
£m
Contractual
amount due
on maturity
£m
Fair value
£m
Contractual
amount due
on maturity
£m
Debt securities 42,395 44,910 49,244 52,306
Deposits 7,206 7,301 8,071 9,161
Liabilities to customers under investment contracts 1,823 – 1,705 –
Repurchase agreements 5,423 5,433 5,306 5,331
Other financial liabilities 125 125 470 470
Financial liabilities designated at fair value 56,972 57,769 64,796 67,268
The cumulative own credit net loss recognised is £716m (2013: £800ma).
Note
a The cumulative own credit balance for 2013 is revised to better reflect the cumulative own credit gains/losses.
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