HSBC 2007 Annual Report Download - page 418

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
Notes 24, 25, 26 and 27
416
On 26 March 2007, the Group, through its subsidiary, HSBC France, acquired the 50.01 per cent of Erisa S.A. and
Erisa I.A.R.D. (together now re-named HSBC Assurances) shares not already owned, raising the total holding in each
entity to 100 per cent. HSBC Assurances is a group of companies offering life, property and casualty insurance
products through HSBC France’s networks. HSBC paid a cash consideration of US$304 million in respect of this
acquisition. The fair value of the assets acquired exceeded the cash consideration by US$17 million and this excess
has been recognised within other operating income in the income statement.
The fair values of the assets, liabilities and contingent liabilities of HSBC Assurances were as follows:
Fair
value
Carrying value
immediately
prior to
acquisition
US$m US$m
At date of acquisition
Financial assets designated at fair value ....................................................................................... 7,684 7,684
Derivative assets ............................................................................................................................ 50 50
Loans and advances to banks ........................................................................................................ 94 94
Financial investments .................................................................................................................... 11,211 11,211
Intangible assets ............................................................................................................................ 390 390
Property, plant and equipment ...................................................................................................... 93 93
Prepayments and accrued income ................................................................................................. 257 257
Other assets .................................................................................................................................... 81 81
Deposits by banks .......................................................................................................................... (1) (1)
Financial liabilities designated at fair value .................................................................................. (72) (72)
Derivative liabilities ...................................................................................................................... (15) (15)
Provisions and deferred tax ........................................................................................................... (143) (143)
Other liabilities ............................................................................................................................... (1,434) (1,434)
Liabilities under insurance contracts issued .................................................................................. (17,478) (17,478)
Subordinated liabilities .................................................................................................................. (74) (74)
Net assets acquired ........................................................................................................................ 643 643
Less: carrying value of HSBC’s existing interest in HSBC Assurances ...................................... (322)
Excess fair value of assets acquired .............................................................................................. (17)
Total consideration including costs of acquisition ....................................................................... 304
In addition to the above, there were other minor acquisitions and increases in investment in subsidiaries which
increased goodwill by US$191 million, including US$94 million of goodwill arising on the increase in HSBC’s stake
in Inversiones Financieras Bancosal.
25 Other assets
2007 2006
US$m US$m
Bullion ............................................................................................................................................... 9,244 3,145
Assets held for sale ............................................................................................................................ 2,804 1,826
Reinsurers’ share of liabilities under insurance contracts (Note 30) ................................................. 1,315 1,769
Endorsements and acceptances .......................................................................................................... 12,248 9,577
Other accounts ................................................................................................................................... 13,882 13,506
39,493 29,823
Assets held for sale
2007 2006
US$m US$m
Non-current assets held for sale
Interests in associates ......................................................................................................................... 2 25
Property, plant and equipment ........................................................................................................... 2,502 1,149
Investment properties ......................................................................................................................... 111 13
Financial assets .................................................................................................................................. 185 634
Other .................................................................................................................................................. 4 5
Total assets classified as held for sale ............................................................................................... 2,804 1,826