Lloyds Banking

Lloyds Banking Group plc Monitor

Lloyds Banking Group plc Annual Report 2016
CR Monitor Issue: 
Company covered: 
Lloyds Banking Group plc
Period End: 
31 December, 2016
Report issued on 14 November 2017 covered the following practice issues:
Detailed disclosure of expected impacts on adoption of new financial instruments standard.
Recognition of gain in other comprehensive income following re-classification of instrument from held-to-maturity to available-for-sale.
Restatement of segment reporting information following a change in management structure.
Identification of new areas of audit focus in respect of significant transactions and privileged access to information technology.
Reconciliation of movements disclosed in relation to non-life insurance contracts.

Fair value measurement information under IFRS

IFRS 13 “Fair value measurement” sets out a single consistent framework for measuring fair value within IFRS financial statements and outlines a standardised set of disclosures in respect of fair value measurements. IFRS 13 has been mandatory now for some years, with application being required for annual reporting periods beginning on or after 1 January 2013. This report sets out the results of how requirements of the standard have been put into practice, both in terms of measurement and disclosure, in the consolidated financial statements of 139 large public limited companies with year ends between 31 March 2016 and 1 April 2017. It is not an exhaustive study of all aspects of IFRS 13 application and its conclusions are limited to our findings in respect of the areas analysed within the financial statements reviewed.

Disclosure of the impacts of IFRS 16 "Leases"

IFRS 16 “Leases” will fundamentally change accounting by lessees as it requires assets previously off balance sheet under operating lease arrangements to be brought on balance sheet as is currently the case for finance leased assets. As a result on application companies will recognise both additional assets and additional liabilities. Consequently there will also be knock on effects in the income statement as operating lease charges are replaced by a depreciation charge and a finance expense. This report analyses the financial statements of a range of companies to firstly establish whether there has been any early adoption and secondly to establish what companies are disclosing in respect of IFRS 16 and its future impacts.

Operating Lease disclosures under IFRS

This report sets out our findings in respect of a review of the operating lease disclosures when acting as lessee of 35 companies listed on the London stock exchange. We consider a number of points including the disclosure, as currently governed under IFRS by IAS 17 “Leases”, of total future minimum lease payments focusing on the assets identified and the time periods presented; disclosure of minimum sublease payments expected to be received; disclosure of lease and sublease payments recognised in the period; and disclosure of the general terms of significant leasing arrangements including contingent rent payable basis, the existence and terms of renewal or purchase options and escalation clauses and restrictions imposed by lease arrangements such as those concerning dividends, additional debt and further leasing. 

Related Party Disclosures under IFRS

Focusing on a sample of 30 large listed European companies that report under IFRS, supplemented by Company Reporting data and comment, this report analyses the types of related parties identified and the form that company disclosures take.

Accounting for Property Plant and Equipment under IFRS

Focusing on a sample of 30 large listed European companies that report under IFRS, supplemented by Company Reporting data and comment, this report analyses the types of Property Plant and Equipment recognised by companies and the disclosures given in their respect including those relating to the determination of carrying amounts and depreciation charges as well as the clarity of disclosures in relation to movements during the year.