Notes to the accounts
for the year ended 31 December 2007
21. Non-current assets held for sale
From time to time, Group companies inject capital into funds operated by the Group (seed capital). Where the Group holds more than 50 per cent. of the fund in which it is investing and where voting rights are attached to the holding, the Group technically controls the fund and it becomes a subsidiary of the Group. Where the Group is actively seeking to reduce its holding, the fund is classified as being held for sale as it is considered highly probable that the fund will not remain under the control of the Group one year after the original investment is made.
If the Group still retains control of the fund after this time, the fund ceases to be classified as held for sale and is consolidated.
| 2007 £mn |
2006 £mn |
|
|---|---|---|
| Seed capital classified as being held for sale | 37.5 | 60.1 |
At 31 December 2007, the fair value of non-current assets held for sale was £38.0 million (2006: £61.7 million).
In the year to 31 December 2007, eight investments in funds were classified as non-current assets held for sale. The eight funds in which the Group held seed capital investments at the start of the year ceased to be classified as non-current assets held for sale as they no longer met the conditions within IFRS 5 regarding such classifications. Investments cease to be classified as held for sale when they are no longer controlled by the Group. This may happen either through sale of the investment and/or dilution of the Group's holding.
The effect of reclassifying these funds on the results of operations is to increase revenue by £1.1 million in 2007 (2006: decrease of £0.9 million).
£1.0 million (2006: £nil) has been charged to the income statement in relation to non-current assets held for sale.
The Group's exposure to credit risk is represented by the carrying amount of the assets.