Barclays 2015 Annual Report Download - page 274

272 I Barclays PLC Annual Report 2015 home.barclays/annualreport
Notes to the financial statements
13 Trading portfolio
Accounting for trading portfolio assets and liabilities
In accordance with IAS 39, all assets and liabilities held for trading purposes are held at fair value with gains and losses in the changes in fair value
taken to the income statement in Net trading income (Note 5).
Trading portfolio assets Trading portfolio liabilities
2015
£m
2014
£m
2015
£m
2014
£m
Debt securities and other eligible bills 45,576 65,997 (24,985) (28,739)
Equity securities 29,055 44,576 (8,982) (16,022)
Traded loans 2,474 2,693 – –
Commodities 243 1,451 – (363)
Trading portfolio assets/(liabilities) 77,348 114,717 (33,967) (45,124)
14 Financial assets designated at fair value
Accounting for financial assets designated at fair value
In accordance with IAS 39, financial assets may be designated at fair value, with gains and losses taken to the income statement in Net trading
income (Note 5) and Net investment income (Note 6). The Group has the ability to make the fair value designation 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 Derivative financial instruments).
The details on how the fair value amounts are arrived for financial assets designated at fair value are described in Fair value of assets and liabilities
(Note 18).
2015
£m
2014
£m
Loans and advances 17,913 20,198
Debt securities 1,383 4,448
Equity securities 6,197 6,306
Reverse repurchase agreementsa 49,513 5,236
Customers’ assets held under investment contracts 1,449 1,643
Other financial assets 375 469
Financial assets designated at fair value 76,830 38,300
Credit risk of loans and advances designated at fair value and related credit derivatives
The following table shows the maximum exposure to credit risk, the changes in fair value attributable to changes in credit risk, and the cumulative
changes in fair value since initial recognition together with the amount by which related credit derivatives mitigate this risk:
Maximum exposure as at
31 December
Changes in fair value
during the year ended
Cumulative changes in
fair value from inception
2015
£m
2014
£m
2015
£m
2014
£m
2015
£m
2014
£m
Loans and advances designated at fair value, attributable to credit risk 17,913 20,198 69 (112) (629) (828)
Value mitigated by related credit derivatives 417 359 26 – 42 18
Note
a During 2015, new reverse repurchase agreements and other similar secured lending in certain businesses have been designated at fair value to better align to the way the business
manages the portfolio’s risk and performance.
The notes included in this section focus on assets and liabilities the Group holds and recognises at fair value. Fair value refers to the price that
would be received to sell an asset or the price that would be paid to transfer a liability in an arm’s-length transaction with a willing
counterparty, which may be an observable market price or, where there is no quoted price for the instrument, may be an estimate based on
available market data. Detail regarding the Group’s approach to managing market risk can be found on pages 134 and 135.