HSBC 2001 Annual Report Download - page 220

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
218
HSBC HSBC Holdings Associates
US$m US$m US$m
Revaluation reserves:
– Investment property revaluation reserve:
At 1 January 1999 ..................................................................... 328 – 48
Unrealised deficit on revaluation of land and buildings............ (46) – (1)
Transfer to revaluation reserve.................................................. (6) – –
Realisation on disposal of properties......................................... (1) – –
Exchange and other movements................................................ (2) – (1)
At 31 December 1999 ............................................................... 273 – 46
– Revaluation reserve:
At 1 January 1999 ..................................................................... 1,792 19,566 8
Realisation on disposal of properties......................................... (7) – –
Unrealised surplus on revaluation of properties ........................ 371 2 –
Transfer arising on redenomination of share capital ................. – (271) –
Transfer to profit and loss account reserve on disposal of
subsidiary undertakings ......................................................... – (51) –
Transfer of depreciation from profit and loss account reserve (22) – –
Transfer from investment property revaluation reserve............. 6 – –
Net increase in attributable net assets of subsidiary
undertakings........................................................................... – 2,588 –
Exchange and other movements................................................ (71) 40 (3)
At 31 December 1999 ............................................................... 2,069 21,874 5
Total revaluation reserves ............................................................. 2,342 21,874 51
Profit and loss account:
At 1 January 1999 ..................................................................... 21,359 3,913 247
Retained profit/(deficit) for the year.......................................... 2,536 (307) 123
Transfer arising on redenomination of share capital ................. – 271 –
Transfer from revaluation reserve on disposal of subsidiary
undertakings........................................................................... – 51 –
Transfer of depreciation to revaluation reserve ......................... 22 – –
Revaluation reserve realised on disposal of properties.............. 8 – –
Arising on shares issued in lieu of dividends ............................ 679 679 –
Capitalised on issue of shares to QUEST.................................. (185) (185) –
Exchange and other movements................................................ (465) – (145)
At 31 December 1999 ............................................................... 23,954 4,422 225
The accumulated foreign exchange translation adjustment as at 31 December 2001 reduced HSBC’ s reserves by
US$3,370 million (2000: US$2,073 million; 1999: US$1,009 million).
Cumulative goodwill amounting to US$5,138 million (2000: US$5,138 million) has been charged against reserves in
respect of acquisitions of subsidiary undertakings prior to 1 January 1998.
Statutory share premium relief under Section 131 of the Companies Act 1985 was taken in respect of the acquisition
of CCF in 2000; in HSBC’ s consolidated accounts the fair value difference of US$8,290 million was transferred to a
merger reserve.
Many of HSBC’ s banking subsidiary undertakings, joint ventures and associates operate under local regulatory
jurisdictions which could potentially restrict the amount of reserves which can be remitted to HSBC Holdings plc in
order to maintain local regulatory capital ratios. In addition, as stated in Note 32(a) above, the remittance of reserves
may result in further taxation liabilities.