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HSBC BANK PLC
Notes on the Financial Statements (continued)
145
Effects of changes in significant unobservable assumptions to reasonably possible alternatives
The following table shows the sensitivity of Level 3 fair values to reasonably possible alternative assumptions:
The group
Reflected in profit or loss
Reflected in other
comprehensive income
Favourable
changes
Unfavourable
changes
Favourable
changes
Unfavourable
changes
£m
£m
£m
£m
At 31 December 2014
Derivatives/trading assets/trading liabilities1
161
(140)
–
–
Financial assets and liabilities designated at fair value
–
(1)
–
–
Financial investments: available-for-sale
11
(7)
73
(95)
At 31 December 2013
Derivatives/trading assets/trading liabilities1
180
(133)
–
–
Financial assets and liabilities designated at fair value
–
–
–
–
Financial investments: available-for-sale
–
–
89
(133)
The bank
Reflected in profit or loss
Reflected in other
comprehensive income
Favourable
changes
Unfavourable
changes
Favourable
changes
Unfavourable
changes
£m
£m
£m
£m
At 31 December 2014
Derivatives/trading assets/trading liabilities1
162
(150)
–
–
Financial assets and liabilities designated at fair value
–
–
–
–
Financial investments: available-for-sale
–
–
76
(90)
At 31 December 2013
Derivatives/trading assets/trading liabilities1
209
(146)
–
–
Financial assets and liabilities designated at fair value
–
–
–
–
Financial investments: available-for-sale
–
–
238
(276)
1 Derivatives, trading assets and trading liabilities are presented as one category to reflect the manner in which these financial
instruments are risk-managed.
Sensitivity of Level 3 fair values to reasonably possible alternative assumptions by instrument type
Reflected in profit or loss
Reflected in other
comprehensive income
Favourable
changes
Unfavourable
changes
Favourable
changes
Unfavourable
changes
£m
£m
£m
£m
At 31 December 2014
Private equity investments
6
(6)
38
(60)
Asset-backed securities
28
(11)
35
(35)
Structured notes
6
(6)
–
–
Derivatives
69
(75)
–
–
Other portfolios
63
(50)
–
–
At 31 December 2013
Private equity investments
–
(7)
24
(74)
Asset-backed securities
28
(8)
65
(59)
Structured notes
6
(6)
–
–
Derivatives
129
(93)
–
–
Other portfolios
17
(19)
–
–
Favourable and unfavourable changes are determined on the basis of changes in the value of the instrument as a result of
varying the levels of the unobservable parameters using statistical techniques. When parameters are not amenable to
statistical analysis, quantification of uncertainty is judgemental. When the fair value of a financial instrument is affected
by more than one unobservable assumption, the above table reflects the most favourable or most unfavourable change
from varying the assumptions individually.