88 LV= Annual Report 2012
Notes to the Financial Statements continued
31 December 2012
19. Loans and other receivables
Accounting for loans and other receivables
Loans are initially measured at fair value and then subsequently measured at amortised cost using the effective interest rate method.
Receivables are recognised when due and comprise amounts due to the Society from group undertakings and other receivables. They are
initially recognised at fair value and then subsequently held at amortised cost.
The Group assesses at each Statement of Financial Position date whether a loan or receivable, or a group of loans or receivables, is
impaired. For loans, the amount of any impairment loss is measured as the difference between the carrying amount and the present
value of future cash flows. For receivables, where there is objective evidence that the carrying value is impaired then the impairment loss
will be recognised in the Statement of Comprehensive Income.
Provision for impairment of loans
Provisions for impairment of loans and receivables are based on appraisals of loans and receivables both collectively and individually.
Provisions are made to reflect the estimated net realisable amount, taking into account potential future recoveries and the original
effective interest rate. Balances are written off in full when the debt is considered irrecoverable.
Specific provisions have been made in respect of all identified impaired advances. In calculating the required provision an appropriate
factor is applied based on the present value of expected future cash flows, which is subject to periodic review to ensure its continuing
applicability based on current experience, to reflect the probability that not all such loans will result in eventual loss. Collective provisions
have been made in respect of losses which, although not yet specifically identified, are expected from experience to arise.
Group Society
2012 2011 2012 2011
£m £m £m £m
Deposits with credit institutions 14.6 – – –
Loans secured by policies 0.4 0.6 0.4 0.6
Other loans 0.3 0.4 0.3 0.4
Amounts due from group undertakings – – 87.4 109.6
Managing agents rental receivable 12.5 17.0 12.5 17.0
Investments receivable 16.5 13.2 16.5 13.2
Other receivables 58.7 84.8 11.5 14.1
103.0 116.0 128.6 154.9
Within one year 98.8 112.4 126.0 154.0
Over one year 4.2 3.6 2.6 0.9
103.0 116.0 128.6 154.9
The carrying amounts disclosed above reasonably approximate fair value at the Statement of Financial Position date.
20. Other financial liabilities
Group Society
2012 2011 2012 2011
Restated Restated
£m £m £m £m
Collateral received 65.5 66.8 65.5 66.8
Subordinated note (EUR12m - interest payable at the
3 month Euro Deposit Rate plus a margin of 3.65%) 9.7 10.0 – –
Amounts due to group undertakings – – 15.7 5.6
Other 0.3 0.4 0.2 0.3
75.5 77.2 81.4 72.7
The carrying amounts disclosed above reasonably approximate fair value at the Statement of Financial Position date.