HSBC 2014 Annual Report Download - page 161

HSBC BANK PLC
Notes on the Financial Statements (continued)
159
19 Prepayments, accrued income and other assets
Accounting policy
Assets held for sale
Assets and liabilities of disposal groups and non-current assets are classified as held for sale (‘HFS’) when their carrying amounts will
be recovered principally through sale rather than through continuing use. HFS assets are generally measured at the lower of their
carrying amount and fair value less cost to sell, except for those assets and liabilities that are not within the scope of the measurement
requirements of IFRS 1 ‘Non-current Assets Held for Sale and Discontinued Operations’.
Immediately before the initial classification as held for sale, the carrying amounts of the relevant assets and liabilities are measured in
accordance with applicable IFRSs. On subsequent remeasurement of a disposal group, the carrying amounts of any assets and
liabilities that are not within the scope of the measurement requirements of IFRS 1, but are included in a disposal group classified as
held for sale, shall be remeasured under applicable IFRSs before the fair value less costs to sell of the disposal group is determined.
Property, plant and equipment
Land and buildings are stated at historical cost, or fair value at the date of transition to IFRSs (‘deemed cost’), less impairment losses
and depreciation over their estimated useful lives, as follows:
• freehold land is not depreciated;
• freehold buildings are depreciated at the greater of 1% per annum on a straight-line basis or over their remaining useful lives; and
• leasehold land and buildings are depreciated over the shorter of their unexpired terms of the leases or their remaining useful lives.
Equipment, fixtures and fittings (including equipment on operating leases where the group is the lessor) are stated at cost less
impairment losses and depreciation over their useful lives, which are generally between 1 year and 11 years.
Property, plant and equipment is subject to an impairment review if their carrying amount may not be recoverable.
HSBC holds certain properties as investments to earn rentals or for capital appreciation, or both, and those investment properties are
included on balance sheet at fair value.
Prepayments, accrued income and other assets
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Prepayments and accrued income
2,353
2,584
1,184
1,185
Assets held for sale
4,378
33
15
20
Bullion
2,736
928
2,733
880
Reinsurers’share of liabilities under insurance contracts
189
492
–
–
Endorsements and acceptances
591
703
364
343
Employee benefit assets
3,059
1,234
3,059
1,234
Other accounts
5,399
4,465
4,741
3,315
Property, plant and equipment
1,614
2,004
812
1,224
At 31 December
20,319
12,443
12,908
8,201
Assets held for sale
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Non-current assets held for sale:
- property, plant and equipment
25
32
15
20
- Assets of disposal groups held for sale
4,353
–
–
–
- other
–
1
–
–
Total assets classified as held for sale
4,378
33
15
20
Also included within property, plant and equipment classified as held for sale is repossessed property that had been
pledged as collateral by customers. These repossessed assets are expected to be disposed of within 12 months of
acquisition.
Property, plant and equipment – selected information
The group
The bank
2014
2013
2014
2013
£m
£m
£m
£m
Cost or fair value
4,400
4,937
2,930
3,452
Accumulated depreciation and impairment
(2,786)
(2,933)
(2,118)
(2,228)
Net carrying amount at 31 December
1,614
2,004
812
1,224
Additions - cost
411
322
260
227
Disposals - cost
(148)
(189)
(100)
(161)
Property plant and equipment includes
Land and buildings
913
1,044
390
588
Freehold
661
794
132
339
Long leasehold
101
93
105
95
Short leasehold
151
157
153
154
Investment properties1
344
271
–
–
1 Investment properties are valued on a market value basis as at 31 December each year by independent professional valuers who have recent
experience in the location and type of property.