Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 589

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 589
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 in use contains a high degree of uncertainty in estimating the future cash flows and the rates used to discount them. Key judgements include determining the carrying value of the CGU, the cash flows and discount rates used in the calculation. ▪ The cash flow forecasts used by management involve judgement and are based upon a view of the prospects of the business and market conditions at the point in time the assessment is prepared , including the potential effect of climate change . The estimation of cash flows is sensitive to the periods for which detailed forecasts are available and to assumptions regarding long-term sustainable cash flows . ▪ The discount rates applied to the future cash flows also involve judgement. The discount rates used are compared to market participants to ensure that they are appropriate and based on an estimated cost of equity for each CGU. ▪ The choice of a terminal growth rate used to determine the present value of the future cash flows of the CGUs is also a judgement that can impact the outcome of the assessment. The terminal growth rate and discount rates used may vary due to external market rates and economic conditions that are beyond management’s control, including the potential effect of climate change . Further details of some of the key judgements are set out below. 2024 impairment review The 2024 impairment review was performed during Q 4 2024 , with the approach and analysis set out below. Determining the carrying value of CGUs The carrying value for each CGU is the sum of the tangible equity, goodwill and intangible asset balances associated with that CGU. The Group manages the assets and liabilities of its CGUs with reference to the tangible equity of the respective businesses. That tangible equity is derived from the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU and therefore reflects its relative risk, as well as the level of capital that management consider a market participant would be required to hold and retain to support business growth. Goodwill is initially allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the acquisition that generated it. Goodwill is only reallocated if there is a change in its use or when reporting structures are altered in a way that changes the composition of one or more cash generating units to which goodwill has been allocated . The CGUs have been aligned to the changes in business operating segments announced in the 20 February 2024 Investor Update and the 2023 comparatives represented. Cash flows The five -year cash flows used in the calculation are based on the formally agreed medium-term plans