HSBC 2014 Annual Report Download - page 158

HSBC BANK PLC
Notes on the Financial Statements (continued)
156
17 Financial investments
Accounting policy: financial investments
Treasury bills, debt securities and equity securities intended to be held on a continuing basis, other than those designated at fair value,
are classified as available for sale or held to maturity. They are recognised on trade date when the group enters into contractual
arrangements to purchase those instruments, and are normally derecognised when either the securities are sold or redeemed.
(i) Available-for-sale financial assets are initially measured at fair value plus direct and incremental transaction costs. They are
subsequently remeasured at fair value, and changes therein are recognised in other comprehensive income until they are either
sold or become impaired. When available-for-sale financial assets are sold, cumulative gains or losses previously recognised in
other comprehensive income are recognised in the income statement as ‘Gains less losses from financial investments’.
Interest income is recognised over the debt asset’s expected life. Premiums and/or discounts arising on the purchase of dated debt
securities are included in the interest recognised. Dividends from equity assets are recognised in the income statement when the
right to receive payment is established.
(ii) Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that
HSBC positively intends and is able to hold to maturity. Held-to-maturity investments are initially recorded at fair value plus any
directly attributable transaction costs, and are subsequently measured at amortised cost, less any impairment losses.
The accounting policy relating to impairments of available-for-sale securities is presented in Note 1(j).
Financial investments:
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Financial investments:
– which may be repledged or resold by counterparties
14,831
11,435
13,552
8,583
– not subject to repledge or resale by counterparties
61,363
63,595
34,886
36,465
At 31 December
76,194
75,030
48,438
45,048
Treasury and other eligible bills – available for sale
2,849
2,196
2,081
1,927
Debt securities – available for sale
72,336
71,828
45,920
42,667
Equity securities – available for sale
1,009
1,006
437
454
At 31 December
76,194
75,030
48,438
45,048
For the group, £6,172 million (2013: £2,936 million), and for the bank, £4,131 million (2013: £865 million), of the debt
securities issued by banks and other financial institutions are guaranteed by various governments.
18 Assets transferred, assets charged as security for liabilities, and collateral accepted as security for
assets
Accounting policy
Derecognition of financial assets
Financial assets are derecognised when the contractual rights to receive cash flows from the assets has expired; or when HSBC has
transferred its contractual right to receive the cash flows of the financial assets, and either:
• substantially all the risks and rewards of ownership have been transferred; or
• the group has neither retained nor transferred substantially all the risks and rewards, but has not retained control.
Financial assets not qualifying for full derecognition and associated financial liabilities
The group
Carrying
amount of
assets
before
transfer
Carrying
amount of
transferred
assets
Carrying
amount of
associated
liabilities
Fair
value of
transferred
assets
Fair
value of
associated
liabilities
Net
position
£m
£m
£m
£m
£m
At 31 December 2014
Repurchase agreements
31,030
31,550
Securities lending agreements
6,992
5,872
Other sales (recourse to transferred asset only)
389
564
533
533
–
Securitisations recognised to the extent of
continuing involvement
3,590
7
3
7
3
4
At 31 December 2013
Repurchase agreements
60,288
60,657
Securities lending agreements
4,989
4,945
Other sales (recourse to transferred asset only)
581
674
624
624
–
Securitisations recognised to the extent of
continuing involvement
5,021
9
5
9
5
4