RBS 2010 Annual Report Download - page 308

11 Financial instruments - classification continued
Reclassification of financial instruments
The Group has reclassified financial assets from the held-for-trading
(HFT) and available-for-sale (AFS) categories into the loans and
receivables (LAR) category (as permitted by paragraph 50D of IAS 39 as
amended) and from the held-for-trading category into the available-for-
sale category (as permitted by paragraph 50B of IAS 39 as amended).
The turbulence in the financial markets during the second half of 2008
was regarded by management as rare circumstances in the context of
paragraph 50B of IAS 39 as amended.
The tables below show the carrying value, fair value and the effect on
profit or loss of reclassifications undertaken by the Group in 2008 and
2009. There were no reclassifications in 2010.
31 December 2010
Amount recognised in
profit or loss
Carrying
value Fair value Income
Impairment
releases/(losses)
Amount
that would
have been
recognised had
reclassification
not occurred
Reduction in
profit or loss
as result of
reclassification
2010 £m £m £m £m £m £m
Reclassified from HFT to LAR
Loans
-leveraged finance 1,100 963 88 59 317 170
- corporate and other loans 4,278 3,465 146 (205) 174 233
5,378 4,428 234 (146) 491 403
Debt securities
-CDO 22 22 1 — 1 —
- RMBS 983 787 24 (1) 139 116
- CMBS 844 732 — (13) 133 146
- CLOs 417 368 8 (3) 67 62
- other ABS 626 559 (6) — 3 9
- other 638 653 21 — 81 60
3,530 3,121 48 (17) 424 393
8,908 7,549 282 (163) 915 796
Reclassified from HFT to AFS (1)
Debt securities
-CDO 1,537 1,537 136 57 369 176
- RMBS 2,018 2,018 40 (4) 34 (2)
- CMBS 52 52 5 — 11 6
- CLOs 2,406 2,406 212 — 298 86
- other ABS 339 339 19 — 17 (2)
- other 94 94 29 — 36 7
6,446 6,446 441 53 765 271
Equity securities 1 1 29 — 38 9
6,447 6,447 470 53 803 280
Reclassified from AFS to LAR (2)
Debt securities 422 380 (31) (50) (81) —
15,777 14,376 721 (160) 1,637 1,076
Notes:
(1) The amount taken to AFS reserves was £326 million.
(2) The amount that would have been taken to AFS reserves if reclassification had not occurred is £98 million.
RBS Group 2010306
Notes on the accounts continued