HSBC 2010 Annual Report Download - page 322

HSBC HOLDINGS PLC
Notes on the Financial Statements (continued)
18 – Reclassification of financial assets / 19 – Financial assets designated at fair value
320
Fair values of HSBC Holdings’ financial instruments not carried at fair value on the balance sheet
At 31 December 2010 At 31 December 2009
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Assets
Loans and advances to HSBC undertakings ............................................ 21,238 21,798 23,212 23,871
Liabilities
Amounts owed to HSBC undertakings .................................................... 2,932 2,963 3,711 3,827
Debt securities in issue ............................................................................. 2,668 2,960 2,839 3,141
Subordinated liabilities ............................................................................. 13,313 14,428 14,406 15,666
18 Reclassification of financial assets
During the second half of 2008, HSBC reclassified US$15.3bn and US$2.6bn of financial assets from the held-for-
trading category to the loans and receivables and available-for-sale classifications, respectively, as permitted by the
relevant amendment to IAS 39 and explained in Note 2(e) on the Financial Statements. No further reclassifications
were undertaken by HSBC in 2010 and 2009.
Reclassification of HSBC’s financial assets
At 31 December 2010 At 31 December 2009
Carrying
amount
Fair
value
Carrying
amount
Fair
value
US$m US$m US$m US$m
Reclassification to loans and receivables
ABSs ......................................................................................................... 5,892 4,977 7,827 6,177
Trading loans – commercial mortgage loans ........................................... 522 493 553 506
Leveraged finance and syndicated loans .................................................. 4,533 4,166 5,824 5,434
10,947 9,636 14,204 12,117
Reclassification to available for sale
Corporate debt and other securities .......................................................... 91 91 1,408 1,408
11,038 9,727 15,612 13,525
The following table shows the fair value gains and losses, income and expense recognised in the income statement in
respect of reclassified assets and the gains and losses that would have been recognised if no reclassification had taken
place.
Effect of reclassifying and not reclassifying financial assets
Financial assets reclassified to:
loans and receivables
available
for sale
ABSs
Trading loans
– commercial
mortgage
loans
Leveraged
finance and
syndicated
loans Total
Corporate
debt and
other
securities Total
US$m US$m US$m US$m US$m US$m
2010
Recorded in the income statement1 ... 235 29 346 610 56 666
Assuming no reclassification2 ............ 908 45 307 1,260 59 1,319
Net effect of reclassification .............. (673) (16) 39 (650) (3) (653)
Attributable to:
Europe ........................................... (527) (16) (23) (566) (2) (568)
North America ............................... (146) – 49 (97) (1) (98)
Middle East .................................... – – 13 13 – 13