Company: BCS
Filing Date: 2025-02-13
Form Type: 20-F
Source: 0000312069-25-000114
Chunk: 524

Company: BARCLAYS PLC
Filing Date: 2025-02-13
Form: 20-F
Chunk 524
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 certain assumptions by inspecting and evaluating management’s documented methodology for how the assumption is determined; and – Reperforming and assessing, for a selection of models, the reasonableness of the model predictions by comparing them against actual results and evaluating the resulting differences. In addition, we involved economic professionals with specialised skills and knowledge, who assisted in: – Assessing the reasonableness of the Company’s methodology and models used for determining the economic scenarios used and the probability weightings applied to them; – Assessing key economic variables which included comparing a selection of economic variables to external sources; and – Assessing the overall reasonableness of the economic forecasts by comparing the Company’s forecasts to our own modelled forecasts. Valuation of certain level 3 and level 2 financial instruments recorded at fair value As discussed in Note 17 to the Company’s consolidated financial statements, the balances of financial assets and liabilities recorded at fair value as at December 31, 2024 were £ 732bn and £619bn, respectively. This includes Level 3 assets (£24bn) and liabilities (£7bn) respectively. The Company has Level 2 financial assets at fair value of £600bn and financial liabilities at fair value of £584bn. The Company is required to apply valuation techniques which often involve the exercise of significant judgement and the use of assumptions and valuation models over certain level 3 and level 2 financial assets and liabilities. We identified the valuation of certain level 3 and level 2 financial instruments recorded at fair value as a critical audit matter. This is because there was significant measurement uncertainty associated with the fair value estimates of these instruments and subjective auditor judgement, including specialised skills and knowledge, was required to evaluate pricing data inputs, valuation models and fair value adjustments ("FVA"), including portfolio-level FVAs related to credit, collateralisation and funding (commonly referred to as "XVAs").

| Strategy                                 | Shareholderinformation | Climate andsustainability report | Governance | Riskreview | Financialreview |     | Financialstatements |     | Barclays PLC 2024Annual Reporton Form 20-F | 355 |
| Independent Auditor's Report (continued) |                        |                                  |            |            |                 |     |                     |     |                                            |     |

The following are the primary procedures we performed to address this critical audit matter: • We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to measure fair value of these portfolios. This included controls related to (1) the independent price verification