RBS 2013 Annual Report Download - page 383
Download and view the complete annual report
Please find page 383 of the 2013 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1
-
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
-
197
-
198
-
199
-
200
-
201
-
202
-
203
-
204
-
205
-
206
-
207
-
208
-
209
-
210
-
211
-
212
-
213
-
214
-
215
-
216
-
217
-
218
-
219
-
220
-
221
-
222
-
223
-
224
-
225
-
226
-
227
-
228
-
229
-
230
-
231
-
232
-
233
-
234
-
235
-
236
-
237
-
238
-
239
-
240
-
241
-
242
-
243
-
244
-
245
-
246
-
247
-
248
-
249
-
250
-
251
-
252
-
253
-
254
-
255
-
256
-
257
-
258
-
259
-
260
-
261
-
262
-
263
-
264
-
265
-
266
-
267
-
268
-
269
-
270
-
271
-
272
-
273
-
274
-
275
-
276
-
277
-
278
-
279
-
280
-
281
-
282
-
283
-
284
-
285
-
286
-
287
-
288
-
289
-
290
-
291
-
292
-
293
-
294
-
295
-
296
-
297
-
298
-
299
-
300
-
301
-
302
-
303
-
304
-
305
-
306
-
307
-
308
-
309
-
310
-
311
-
312
-
313
-
314
-
315
-
316
-
317
-
318
-
319
-
320
-
321
-
322
-
323
-
324
-
325
-
326
-
327
-
328
-
329
-
330
-
331
-
332
-
333
-
334
-
335
-
336
-
337
-
338
-
339
-
340
-
341
-
342
-
343
-
344
-
345
-
346
-
347
-
348
-
349
-
350
-
351
-
352
-
353
-
354
-
355
-
356
-
357
-
358
-
359
-
360
-
361
-
362
-
363
-
364
-
365
-
366
-
367
-
368
-
369
-
370
-
371
-
372
-
373
-
374
-
375
-
376
-
377
-
378
-
379
-
380
-
381
-
382
-
383
-
384
-
385
-
386
-
387
-
388
-
389
-
390
-
391
-
392
-
393
-
394
-
395
-
396
-
397
-
398
-
399
-
400
-
401
-
402
-
403
-
404
-
405
-
406
-
407
-
408
-
409
-
410
-
411
-
412
-
413
-
414
-
415
-
416
-
417
-
418
-
419
-
420
-
421
-
422
-
423
-
424
-
425
-
426
-
427
-
428
-
429
-
430
-
431
-
432
-
433
-
434
-
435
-
436
-
437
-
438
-
439
-
440
-
441
-
442
-
443
-
444
-
445
-
446
-
447
-
448
-
449
-
450
-
451
-
452
-
453
-
454
-
455
-
456
-
457
-
458
-
459
-
460
-
461
-
462
-
463
-
464
-
465
-
466
-
467
-
468
-
469
-
470
-
471
-
472
-
473
-
474
-
475
-
476
-
477
-
478
-
479
-
480
-
481
-
482
-
483
-
484
-
485
-
486
-
487
-
488
-
489
-
490
-
491
-
492
-
493
-
494
-
495
-
496
-
497
-
498
-
499
-
500
-
501
-
502
-
503
-
504
-
505
-
506
-
507
-
508
-
509
-
510
-
511
-
512
-
513
-
514
-
515
-
516
-
517
-
518
-
519
-
520
-
521
-
522
-
523
-
524
-
525
-
526
-
527
-
528
-
529
-
530
-
531
-
532
-
533
-
534
-
535
-
536
-
537
-
538
-
539
-
540
-
541
-
542
-
543
-
544
-
545
-
546
-
547
-
548
-
549
-
550
-
551
-
552
-
553
-
554
-
555
-
556
-
557
-
558
-
559
-
560
-
561
-
562
-
563
-
564
Accounting policies
381
12. General insurance
Premiums earned - insurance and reinsurance premiums receivable for
the whole period of cover provided by contracts incepted during the year
are adjusted by an unearned premium provision, which represents the
proportion of the premiums that relate to periods of insurance after the
balance sheet date. Unearned premiums are calculated over the period
of exposure under the policy, on a daily basis, 24ths basis or allowing for
the estimated incidence of exposure under policies.
Insurance claims - insurance claims are recognised in the accounting
period in which the loss occurs. Provision is made for the full cost of
settling outstanding claims at the balance sheet date, including claims
incurred but not yet reported at that date. Outstanding claims provisions
are not discounted for the time value of money except for claims to be
settled by periodical payments. Claims handling expenses are also
included.
Deferred acquisition costs - acquisition costs relating to new and
renewing insurance policies are matched with the earning of the
premiums to which they relate. A proportion of acquisition costs incurred
during the year are deferred to the subsequent accounting period to
match the extent to which premiums written during the year are unearned
at the balance sheet date. The principal acquisition costs deferred are
direct advertising expenditure, third party administration fees, commission
paid and costs associated with telesales and underwriting staff.
Reinsurance - the Group cedes insurance risk in the normal course of
business. Reinsurance assets represent balances due from reinsurance
companies. Amounts recoverable from reinsurers are estimated on a
basis consistent with the outstanding claims provision or settled claims
associated with the reinsurer's policies and are in accordance with the
related reinsurance contract. A reinsurance bad debt provision is
assessed in respect of reinsurance debtors.
13. Provisions
The Group recognises a provision for a present obligation resulting from
a past event when it is more likely than not that it will be required to
transfer economic benefits to settle the obligation and the amount of the
obligation can be estimated reliably.
Provision is made for restructuring costs, including the costs of
redundancy, when the Group has a constructive obligation to restructure.
An obligation exists when the Group has a detailed formal plan for the
restructuring and has raised a valid expectation in those affected by
starting to implement the plan or announcing its main features.
If the Group has a contract that is onerous, it recognises the present
obligation under the contract as a provision. An onerous contract is one
where the unavoidable costs of meeting the Group’s contractual
obligations exceed the expected economic benefits. When the Group
vacates a leasehold property, a provision is recognised for the costs
under the lease less any expected economic benefits (such as rental
income).
Contingent liabilities are possible obligations arising from past events,
whose existence will be confirmed only by uncertain future events, or
present obligations arising from past events that are not recognised
because either an outflow of economic benefits is not probable or the
amount of the obligation cannot be reliably measured. Contingent
liabilities are not recognised but information about them is disclosed
unless the possibility of any outflow of economic benefits in settlement is
remote.
14. Tax
Income tax expense or income, comprising current tax and deferred tax,
is recorded in the income statement except income tax on items
recognised outside profit or loss which is credited or charged to other
comprehensive income or to equity as appropriate.
Current tax is income tax payable or recoverable in respect of the taxable
profit or loss for the year arising in profit or loss, other comprehensive
income or equity. Provision is made for current tax at rates enacted or
substantively enacted at the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable in respect
of temporary differences between the carrying amount of an asset or
liability for accounting purposes and its carrying amount for tax purposes.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that they will be recovered. Deferred tax is not recognised on
temporary differences that arise from initial recognition of an asset or a
liability in a transaction (other than a business combination) that at the
time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is calculated using tax rates expected to apply in the
periods when the assets will be realised or the liabilities settled, based on
tax rates and laws enacted, or substantively enacted, at the balance
sheet date.
Deferred tax assets and liabilities are offset where the Group has a
legally enforceable right to offset and where they relate to income taxes
levied by the same taxation authority either on an individual Group
company or on Group companies in the same tax group that intend, in
future periods, to settle current tax liabilities and assets on a net basis or
on a gross basis simultaneously.
15. Financial assets
On initial recognition, financial assets are classified into held-to-maturity
investments; held-for-trading; designated as at fair value through profit or
loss; loans and receivables; or available-for-sale financial assets. Regular
way purchases of financial assets classified as loans and receivables are
recognised on settlement date; all other regular way transactions in
financial assets are recognised on trade date.
Held-to-maturity investments - a financial asset may be classified as a
held-to-maturity investment only if it has fixed or determinable payments,
a fixed maturity and the Group has the positive intention and ability to
hold to maturity. Held-to-maturity investments are initially recognised at
fair value plus directly related transaction costs. They are subsequently
measured at amortised cost using the effective interest method (see
Accounting policy 3) less any impairment losses.