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Investment in associates and joint ventures
 12 Months Ended
Dec. 31, 2020
Investments accounted for using equity method [abstract]  
Investment in associates and joint ventures
16. Investment in associates and joint ventures
 
   
2020
$m
   
2019
$m
 
Cost
    
  
 
 
   
 
 
 
At 1 January
  
 
145
 
   140 
  
 
 
   
 
 
 
Additions
  
 
17
 
   14 
  
 
 
   
 
 
 
Share of (losses)/gains
  
 
(14
) 
   (3) 
  
 
 
   
 
 
 
System Fund share of losses
  
 
(1
) 
   —   
  
 
 
   
 
 
 
Dividends and distributions
  
 
(7
) 
   (7) 
  
 
 
   
 
 
 
Exchange and other
  
 
(4
) 
   1 
  
 
 
   
 
 
 
At 31 December
  
 
136
 
   145 
  
 
 
   
 
 
 
Impairment
    
  
 
 
   
 
 
 
At 1 January
  
 
(35
) 
   (36) 
  
 
 
   
 
 
 
Charge for the year
a
  
 
(23
) 
   —   
  
 
 
   
 
 
 
Exchange and other
  
 
3
 
   1 
  
 
 
   
 
 
 
At 31 December
  
 
(55
) 
   (35) 
  
 
 
   
 
 
 
Net book value
  
 
81
 
   110 
  
 
 
   
 
 
 
 
a
 
In note 6 the $23m impairment charge is presented net of $4m gain on related put option.
Barclay associate
The Group held one material associate investment at 31 December 2020, a 19.9% interest in 111 East 48th Street Holdings, LLC (the ‘Barclay associate’) which owns InterContinental New York Barclay, a hotel managed by the Group. The investment is classified as an associate and equity accounted. Whilst the Group has the ability to exercise significant influence through certain decision rights, approval rights relating to the hotel’s operating and capital budgets rest solely with the 80.1% majority member. The Group’s ability to receive cash dividends is dependent on the hotel generating sufficient income to satisfy specified owner returns.
Due to the significant trading impact of
Covid-19
and resulting restrictions in New York, the hotel was closed for most of 2020 and does not expect to reopen until Spring 2021. The 2021 closure period and the significant impact on RevPAR during the recovery period is considered to affect the hotel valuation, hence impairment testing was performed on the Barclay associate, resulting in an impairment charge of $13m. There is also a related put option which was valued at $4m. Details of the put option, impairment testing performed and sensitivities are contained on page 136.
Summarised financial information in respect of the Barclay associate is set out below:
 
31 December
  
2020
$m
   2019
$m		 
Non-current
assets
  
 
497
 
   515 
  
 
 
   
 
 
 
Current assets
  
 
32
 
   75 
  
 
 
   
 
 
 
Current liabilities
  
 
(19
) 
   (22) 
  
 
 
   
 
 
 
Non-current
liabilities
  
 
(247
) 
   (323) 
  
 
 
   
 
 
 
Net assets
  
 
263
 
   245 
  
 
 
   
 
 
 
Group share of reported net assets at 19.9%
  
 
52
 
   49 
  
 
 
   
 
 
 
Adjustments to reflect impairment, capitalised costs, and additional rights and obligations under the shareholder agreement
  
 
(9
) 
   4 
  
 
 
   
 
 
 
Carrying amount
  
 
43
 
   53 
  
 
 
   
 
 
 
 
Year ended 31 December
  
2020
$m
   2019
$m		 
  
 
 
   
 
 
 
Revenue
  
 
16
 
   108 
  
 
 
   
 
 
 
Loss from continuing operations and total comprehensive loss for the year
  
 
(52
) 
   (17) 
  
 
 
   
 
 
 
Group’s share of loss for the year, including the cost of funding owner returns
  
 
(13
) 
   (10) 
  
 
 
   
 
 
 
 
Other associates and joint ventures
The summarised aggregated financial information for individually immaterial associates and joint ventures is set out below. These are mainly investments in entities that own hotels which the Group manages.
 
   
Associates
   
Joint ventures
   
Total
 
   
2020
$m
  2019
$m		   2018
$m		   
2020
$m
   2019
$m		   2018
$m		   
2020
$m
  2019
$m		   2018
$m		 
Share of (losses)/gains
                
  
 
 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
   
 
 
 
(Losses)/profits from continuing operations and total comprehensive (loss)/profit for the year
  
 
(3
) 
  7    2   
 
2
 
   —      5   
 
(1
) 
  7    7 
  
 
 
  
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
   
 
 
 
Impairment testing was performed on other associate investments containing hotel assets using management forecasts covering a five-year period, as detailed on page 135. This resulted in impairment of two associates, both in the Americas region, by a total of $8m. Estimated future cash flows were discounted at
pre-tax
rates of 12.0% and 8.4%, resulting in recoverable amounts of $1m and $4m respectively.
A further associate with a value of $5m at 31 December 2019 was liquidated in 2020. A final dividend of $3m was received and the remaining investment of $2m was impaired to $nil; the charge is recognised within Central costs.
During 2018, the Group received a distribution of $32m from a joint venture following the sale of the hotel owned by the joint venture. A further $2m was received in 2020 on liquidation of the joint venture.