Barclays 2015 Annual Report Download - page 329

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Scope of consolidation
Notes to the financial statements
36 Principal subsidiaries
Barclays applies IFRS 10 Consolidated Financial Statements. The consolidated financial statements combine the financial statements of Barclays
PLC and all its subsidiaries. Subsidiaries are entities over which the Group has control. Under IFRS 10, this is when the Group is exposed or has
rights to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the entity.
The Group reassesses whether it controls an entity if facts and circumstances indicate that there have been changes to its power, its rights to
variable returns or its ability to use its power to affect the amount of its returns.
Intra-group transactions and balances are eliminated on consolidation and consistent accounting policies are used throughout the Group for the
purposes of the consolidation. Changes in ownership interests in subsidiaries are accounted for as equity transactions if they occur after control
has been obtained and they do not result in loss of control.
The significant judgements used in applying this policy are set out below.
Accounting for investment in subsidiaries
In the individual financial statements of Barclays PLC, investments in subsidiaries are stated at cost less impairment.
Principal subsidiaries for the Group are set out below. This includes those subsidiaries that are most significant in the context of the Group’s
business, results or financial position.
Company name
Principal place of business or
incorporation Nature of business
Percentage
of voting
rights held
%
Non-
controlling
interests –
proportion of
ownership
interests
%
Non-
controlling
interests –
proportion of
voting
interests
%
Barclays Bank PLC England Banking, holding company 100 11 –
Barclays Capital Securities Limited England Securities dealing 100 – –
Barclays Private Clients International Limited Isle of Man Banking 100* – –
Barclays Securities Japan Limited Japan Securities dealing 100 – –
Barclays Africa Group Limited South Africa Banking 62 38 38
Barclays Capital Inc United States Securities dealing 100 – –
Barclays Bank Delaware United States Credit card issuer 100 – –
The country of registration or incorporation is also the principal area of operation of each of the above subsidiaries. Investments in subsidiaries held
directly by Barclays Bank PLC are marked *. See Note 46 Related undertakings for further information on the Group’s undertakings.
Ownership interests are in some cases different to voting interests due to the existence of non-voting equity interests, such as preference shares.
See Note 33 Non-controlling interests for more information.
Barclays Bank SAU was considered a principal subsidiary in 2014. Barclays Bank SAU and its subsidiaries, comprising all its associated assets and
liabilities, was sold to a third party, Caixabank, SA on 2 January 2015.
Significant judgements and assumptions used to determine the scope of the consolidation
Determining whether the Group has control of an entity is generally straightforward based on ownership of the majority of the voting capital.
However, in certain instances, this determination will involve significant judgement, particularly in the case of structured entities where voting rights
are often not the determining factor in decisions over the relevant activities. This judgement may involve assessing the purpose and design of the
entity. It will also often be necessary to consider whether the Group, or another involved party with power over the relevant activities, is acting as a
principal in its own right or as an agent on behalf of others.
There is also often considerable judgement involved in the ongoing assessment of control over structured entities. In this regard, where market
conditions have deteriorated such that the other investors’ exposures to the structure’s variable returns have been substantively eliminated, the
Group may conclude that the managers of the structured entity are acting as its agent and therefore will consolidate the structured entity.
An interest in equity voting rights exceeding 50% would typically indicate that the Group has control of an entity. However, certain entities, as set out
below, are excluded from consolidation because the Group does not have exposure to their variable returns.
This section presents information on the Group’s investments in subsidiaries, joint ventures and associates and its interests in structured
entities. Detail is also given on securitisation transactions the Group has entered into and arrangements that are held off-balance sheet.
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