Setting new standards - Friends Life

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FINANCIAL STATEMENTS IFRS FINANCIAL STATEMENTS EEV SUPPLEMENTARY INFORMATION Notes to the consolidated accounts continued 21. Financial assets The Group’s financial assets are summarised by measurement categories as follows: 2006 2005 £m £m Fair value through the income statement 45,135 42,072 Loans 15 19 Total financial assets 45,150 42,091 (a) Financial assets at fair value through the income statement 2006 2005 £m £m Listed Shares and other variable yield securities 21,827 20,365 Debt securities and other fixed-income securities 16,138 16,815 Total listed financial assets 37,965 37,180 Unlisted Shares and other variable yield securities 783 398 Units in unit trusts and shares in open-ended investment companies 5,335 3,501 Debt securities and other fixed-income securities 41 49 Participation in investment pools 136 141 Derivative financial instruments 212 239 Deposits with credit institutions 663 564 Total unlisted financial assets 7,170 4,892 Total financial assets at fair value through the income statement 45,135 42,072 For listed financial assets at fair value through the income statement, fair value is by reference to quoted bid-values. If a quoted bid-value is not available a valuation technique is applied. The fair value of shares and other variable yield securities and of derivative financial instruments, are estimated using pricing models or discounted cash flow techniques. Where pricing models are used, inputs are based on market related data at the balance sheet date. Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimates and the discount rate used is a market related rate for a similar instrument. For units in unit trusts and shares in open-ended investment companies, fair value is by reference to published bid-values. Participation in investment pools mainly relates to property investments. Property is independently valued in accordance with the Royal Institute of Chartered Surveyor’s guidelines on the basis of open market values as at each year end. The fair value of floating rate and overnight deposits with credit institutions is their carrying value. The carrying value is the cost of the deposit and accrued interest. The fair value of fixed-interest bearing deposits is estimated using discounted cash flow techniques. Expected cash flows are discounted at current market rates for similar instruments at the balance sheet date. The total amount of the change in fair value of investments estimated using a valuation technique that is recognised in the income statement during the year is a charge of £98m (2005: credit of £143m). 128 <strong>Friends</strong> Provident Annual Report & Accounts 2006
PARENT COMPANY ACCOUNTS ABBREVIATIONS AND DEFINITIONS Notes to the consolidated accounts continued 21. Financial assets continued (b) Loans 2006 2005 £m £m Mortgage loans 2 3 Other loans 13 16 Total loans 15 19 The fair value of loans at both year ends is the same as their carrying value. (c) Unit-linked assets and liabilities The amounts included in the balance sheet in respect of assets and liabilities held within unit-linked funds are as follows: 2006 2005 £m £m Investment properties 975 645 Shares and other variable yield securities 12,847 12,232 Units in unit trusts and shares in open-ended investment companies 8,200 6,683 Debt securities and other fixed-income securities 3,472 1,703 Derivative financial instruments 9 - Deposits with credit institutions 518 244 Other receivables 333 363 Cash and cash equivalents 1,796 772 Total assets 28,150 22,642 Other payables (303) (195) Total unit-linked assets less liabilities 27,847 22,447 The impact of consolidating open-ended investment companies in which the Group has a holding in excess of 50% has been excluded from the analysis of linked assets. This has resulted in some realignment of the disclosure reported in 2005. <strong>Friends</strong> Provident Annual Report & Accounts 2006 129
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Setting new standards Friends Provi
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ANNUAL REVIEW CORPORATE GOVERNANCE
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Group financial highlights Group
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INTERNATIONAL LIFE & PENSIONS ASSET
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DIRECTORS’ REPORT CORPORATE GOVER
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FINANCIAL STATEMENTS Independent Au
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PARENT COMPANY ACCOUNTS ABBREVIATIO
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Friends Provident plc Pixham End Do
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