HSBC 2014 Annual Report Download - page 162

HSBC BANK PLC
Notes on the Financial Statements (continued)
160
20 Interests in associates and joint ventures
Accounting policy
Investments in which the group, together with one or more parties, has joint control of an arrangement set up to undertake an
economic activity are classified as joint ventures. The group classifies investments in entities over which it has significant influence,
and that are neither subsidiaries (Note 22) nor joint ventures, as associates.
Investments in associates and interests in joint ventures are recognised using the equity method. Under this method, such
investments are initially stated at cost, including attributable goodwill, and are adjusted thereafter for the post-acquisition change in
the group’s share of net assets. Goodwill arises on the acquisition of interests in joint ventures and associates when the cost of
investment exceeds the group’s share of the net fair value of the associate’s or joint venture’s identifiable assets and liabilities.
An investment in an associate is tested for impairment when there is an indication that the investment may be impaired. Goodwill on
acquisitions of interests in joint ventures and associates is not tested separately for impairment.
Profits on transactions between the group and its associates and joint ventures are eliminated to the extent of the group’s interest in
the respective associates or joint ventures. Losses are also eliminated to the extent of the group’s interest in the associates or joint
ventures unless the transaction provides evidence of an impairment of the asset transferred.
Principal associates of the group and the bank
VocaLink Holdings Ltd (‘VocaLink’) is a principal associate of the bank and the group. VocaLink is incorporated in England
and its principal activity is that of providing electronic payments and transaction services.
At 31 December 2014, the group had a 15.91% interest in the £133 million issued equity capital of VocaLink (2013:
15.91%). The carrying amount of the group’s interest was £61 million at 31 December 2014 (2013: £59 million).
VocaLink is accounted for as an associate due to the group’s involvement in the operational activities, policy-making
decisions and representation on the board of directors.
Summarised financial information on associates
The group’s share of:
2014
2013
£m
£m
Assets
29
100
Liabilities
15
52
Revenue
21
38
Profit after tax
2
–
Interests in significant joint ventures
Vaultex UK Limited is a significant joint venture of the bank and the group. Vaultex UK Limited is incorporated in England
and its principal activity is that of cash management services. At 31 December 2014 and 31 December 2013, the group had
a 50% interest in the £10 million issued equity capital.
Summarised financial information on joint ventures
The group’s share of:
2014
2013
£m
£m
Current assets
90
103
Non-current assets
18
17
Current liabilities
90
103
Non-current liabilities
10
10
Income
48
48
Expense
(47)
(48)
Details of all associates and joint ventures, as required under S.409 Companies Act 2006, will be annexed to the next
Annual Return of the bank filed with the UK Registrar of Companies.
21 Goodwill and intangible assets
The group The bank
2014
2013
2014
2013
£m
£m
£m
£m
Goodwill
6,140
6,526
342
298
Present value of in-force long-term assurance business (‘PVIF’)
456
700
–
–
Other intangible assets
698
708
606
593
At 31 December
7,294
7,934
948
891