XML 383 R27.htm IDEA: XBRL DOCUMENT v3.20.4
Other financial assets
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Other financial assets
17. Other financial assets
 
   
2020
$m
   2019
$m		 
Equity securities:
    
  
 
 
   
 
 
 
Equity shares quoted on an active market
  
 
—  
 
   8 
  
 
 
   
 
 
 
Other equity shares
  
 
88
 
   125 
  
 
 
   
 
 
 
  
 
88
 
   133 
  
 
 
   
 
 
 
Restricted funds:
    
  
 
 
   
 
 
 
Shortfall reserve deposit
  
 
9
 
   25 
  
 
 
   
 
 
 
Ring-fenced amounts to satisfy insurance claims:
    
  
 
 
   
 
 
 
Cash
  
 
3
 
   11 
  
 
 
   
 
 
 
Money market funds
  
 
15
 
   16 
  
 
 
   
 
 
 
Bank accounts pledged as security
  
 
43
 
   41 
  
 
 
   
 
 
 
Other
  
 
3
 
   5 
  
 
 
   
 
 
 
  
 
73
 
   98 
  
 
 
   
 
 
 
Trade deposits and loans
  
 
8
 
   57 
  
 
 
   
 
 
 
  
 
169
 
   288 
  
 
 
   
 
 
 
Analysed as:
    
  
 
 
   
 
 
 
Current
  
 
1
 
   4 
  
 
 
   
 
 
 
Non-current
  
 
168
 
   284 
  
 
 
   
 
 
 
  
 
169
 
   288 
  
 
 
   
 
 
 
Equity securities
Equity securities are measured at fair value through other comprehensive income and mainly comprise strategic investments in entities that own hotels which the Group manages. The methodology to calculate fair value and the sensitivities to the relevant significant unobservable inputs are detailed in note 25. The fair value of the most significant investments at 31 December 2020 together with the dividend income received in 2020 is as follows:
 
   
2020
 
   
Fair value
$m
   
Dividend
income
a
$m
 
Investment in entity which owns:
    
  
 
 
   
 
 
 
InterContinental The Willard Washington DC
  
 
22
 
  
 
—  
 
  
 
 
   
 
 
 
InterContinental San Francisco
  
 
15
 
  
 
1
 
  
 
 
   
 
 
 
InterContinental Grand Stanford Hong Kong
  
 
27
 
  
 
—  
 
  
 
 
   
 
 
 
 
a
 
Reported within ‘other operating income’ in the Group income statement.
Restricted funds
The shortfall reserve deposit is held for the specific purpose of funding shortfalls in owner returns relating to the Barclay associate. The calculation of shortfalls is subject to ‘force majeure’ clauses which include epidemics. Any shortfalls funded are subject to potential clawback in future years. The maximum length of time for which the restricted funds will be held is the life of the hotel management agreement. $16m was withdrawn from the deposit during the current year in connection with the refinancing of the hotel’s senior bank loan and to fund working capital requirements.
Amounts ring-fenced to satisfy insurance claims are principally held in the Group’s Captive, which is a regulated entity (see note 21).
The bank accounts pledged as security (£31m) are subject to a charge in favour of the members of the UK unfunded pension arrangement (see note 27). The amounts pledged as security may change in future years subject to the trustees’ agreement and updated actuarial valuations. The bank accounts will continue to be pledged as security until the date at which the UK unfunded pension liabilities have been fully discharged, unless otherwise agreed with the trustees.
Trade deposits and loans
In 2019, trade deposits and loans included a discounted value related to deposits made to SVC. The deposits ($33m) were impaired in full in the year (see page 137) and the contracts were subsequently terminated on 30 November 2020.
Expected credit losses
Other financial assets with a total value of $66m (2019: $136m) are subject to the expected credit loss model requirements of IFRS 9. Equity securities, money market funds and other amounts measured at fair value are excluded. With the exception of the expected credit loss arising on trade deposits and loans (see below), expected credit losses are considered to be immaterial. Included within trade deposits and loans is an owner loan with a principal value of $6m where repayments due in 2020 have not been received; this loan was impaired in full in the year. Other trade deposits and loans are not past due.
 
   
2020
$m
   2019
$m		 
Trade deposits and loans:
    
  
 
 
   
 
 
 
Gross and net balance with no significant increase in credit risk since initial recognition
  
 
4
 
   54 
  
 
 
   
 
 
 
Gross balance with a significant increase in credit risk since initial recognition
  
 
19
 
   —   
  
 
 
   
 
 
 
Provision for lifetime expected credit losses
a
  
 
(15
) 
   —   
  
 
 
   
 
 
 
 
a
 
Comprises $6m and $9m relating to the Americas and EMEAA regions respectively.
Credit risk
Restricted funds are held with bank counterparties which are rated at least A+ based on Standard and Poor’s ratings.
The maximum exposure to credit risk of other financial assets at the end of the reporting period by geographic region is as follows:
 
   
2020
$m
   
2019
$m
 
Americas
  
 
72
 
   169 
  
 
 
   
 
 
 
EMEAA
  
 
64
 
   81 
  
 
 
   
 
 
 
Greater China
  
 
33
 
   38 
  
 
 
   
 
 
 
   
169
   
288