Effects of reclassification upon adoption of IFRS 9 (Tables)

12 Months Ended

Dec. 31, 2018

Accounting policies, changes in accounting estimates and errors [Abstract]

Disclosure of financial assets at date of initial application of IFRS 9



Reconciliation of consolidated balance sheet at 31 December 2017 and 1 January 2018
							IFRS 9 reclassification to							IFRS 9 remeasurement including expected credit losses⁴		IFRS 9 carrying amount at 1 Jan 2018
				IAS 39 carrying amount at 31 Dec 2017	Other changes in classifi-cation		Fair value through profit and loss		Fair value through other compre-hensive income		Amorti-sed cost		Carrying amount post reclassifi-cation	IFRS 9 remeasurement including expected credit losses⁴		IFRS 9 carrying amount at 1 Jan 2018
	Footnotes	IAS 39 measurement category	IFRS 9 measurement category	$m	$m		$m		$m		$m		$m	$m		$m
Assets
Cash and balances at central banks		Amortised cost	Amortised cost	180,624	—		—		—		—		180,624	(3	)	180,621
Items in the course of collection from other banks		Amortised cost	Amortised cost	6,628	—		—		—		—		6,628	—		6,628
Hong Kong Government certificates of indebtedness		Amortised cost	Amortised cost	34,186	—		—		—		—		34,186	—		34,186
Trading assets	1, 3	FVPL	FVPL	287,995	4,329		9		—		(37,924	)	254,409	1		254,410
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	2,5,6,7	FVPL	FVPL	29,464	313		10,055		(3	)	(115	)	39,714	32		39,746
Derivatives		FVPL	FVPL	219,818	—		—		—		—		219,818	—		219,818
Loans and advances to banks	1, 2, 3	Amortised cost	Amortised cost	90,393	(7,099	)	(712	)	—		—		82,582	(23	)	82,559
Loans and advances to customers	1, 2, 3	Amortised cost	Amortised cost	962,964	(7,458	)	(3,903	)	—		24		951,627	(1,890	)	949,737
Reverse repurchase agreements – non-trading		Amortised cost	Amortised cost	201,553	—		—		—		—		201,553	—		201,553
Financial investments	5, 13	FVOCI (Available-for- sale – debt instruments)	FVOCI	332,240	—		(3,131	)	83		(7,026	)	322,166	(3	)	322,163
	6, 13	FVOCI (Available-for- sale – equity instruments)	FVOCI	3,917	—		(2,104	)	—		—		1,813	—		1,813
	5	Amortised cost	Amortised cost	52,919	—		—		(80	)	7,141		59,980	(457	)	59,523
Prepayments, accrued income and other assets	1, 7	Amortised cost	Amortised cost	67,191	9,915		(214	)	—		37,900		114,792	(15	)	114,777
Current tax assets		N/A	N/A	1,006	—		—		—		—		1,006	—		1,006
Interests in associates and joint ventures	8	N/A	N/A	22,744	—		—		—		—		22,744	(942	)	21,802
Goodwill and intangible assets	9	N/A	N/A	23,453	—		—		—		—		23,453	(79	)	23,374
Deferred tax assets		N/A	N/A	4,676	—		—		—		—		4,676	38		4,714
Total assets				2,521,771	—		—		—		—		2,521,771	(3,341	)	2,518,430

For footnotes, see page 338.



Reconciliation of HSBC Holdings balance sheet at 31 December 2017 and 1 January 2018
						IFRS 9 reclassification to					IFRS 9 remeasur-ment including expected credit losses		IFRS 9 carrying amount at 1 Jan 2018
				IAS 39 carrying amount at 31 Dec 2017	Other changes in classifi-cation	Fair value through profit and loss		Fair value through other compre-hensive income	Amorti-sed cost	Carrying amount post-reclassifi-cation	IFRS 9 remeasur-ment including expected credit losses		IFRS 9 carrying amount at 1 Jan 2018
	Footnotes	IAS 39 measurement category	IFRS 9 measurement category	$m	$m	$m		$m	$m	$m	$m		$m
Assets
Cash and balances with HSBC undertakings		Amortised cost	Amortised cost	1,985	—	—		—	—	1,985	—		1,985
Financial assets designated and otherwise mandatorily measured at fair value through profit or loss	1	FVPL	FVPL	11,944	—	4,264		—	—	16,208	—		16,208
Derivatives		FVPL	FVPL	2,388	—	—		—	—	2,388	—		2,388
Loans and advances to HSBC undertakings		Amortised cost	Amortised cost	76,627	—	—		—	—	76,627	—		76,627
Financial investments	1	FVOCI (Available for sale – debt instruments)	FVPL	4,264	—	(4,264	)	—	—	—	—		—
		FVOCI (Available for sale – equity instruments)	FVOCI	—	—	—		—	—	—	—		—
		Amortised cost (Debt instruments held to maturity)	Amortised cost	—	—	—		—	—	—	—		—
Prepayments, accrued income and intangible assets		Amortised cost	Amortised cost	662	—	—		—	—	662	—		662
Current tax assets		N/A	N/A	379	—	—		—	—	379	—		379
Investment in subsidiaries		N/A	N/A	92,930	—	—		—	—	92,930	—		92,930
Deferred tax assets		N/A	N/A	555	—	—		—	—	555	(175	)	380
Total assets				191,734	—	—		—	—	191,734	(175	)	191,559

Disclosure of financial liabilities at date of initial application of IFRS 9



Reconciliation for consolidated balance sheet at 31 December 2017 and 1 January 2018 (continued)
						IFRS 9 reclassification to				Carrying amount post- reclassification	IFRS 9 remeasurement including expected credit losses⁴		IFRS 9 carrying amount at 1 Jan 2018
			IAS 39 carrying amount at 31 Dec 2017	Other changes in classification		Fair value through profit and loss	Fair value through other comprehensive income	Amortised cost		Carrying amount post- reclassification	IFRS 9 remeasurement including expected credit losses⁴		IFRS 9 carrying amount at 1 Jan 2018
	Footnotes	Measurement category¹³	$m	$m		$m	$m	$m		$m	$m		$m
Liabilities
Hong Kong currency notes in circulation		Amortised cost	34,186	—		—	—	—		34,186	—		34,186
Deposits by banks	1	Amortised cost	69,922	(5,430	)	—	—	—		64,492	—		64,492
Customer accounts	1	Amortised cost	1,364,462	(4,235	)	—	—	—		1,360,227	—		1,360,227
Repurchase agreements – non-trading		Amortised cost	130,002	—		—	—	—		130,002	—		130,002
Items in the course of transmission to other banks		Amortised cost	6,850	—		—	—	—		6,850	—		6,850
Trading liabilities	1, 11	FVPL	184,361	(103,497	)	—	—	—		80,864	—		80,864
Financial liabilities designated at fair value	9, 10, 11	FVPL	94,429	59,267		—	—	(9,699	)	143,997	9		144,006
Derivatives		FVPL	216,821	—		—	—	—		216,821	—		216,821
Debt securities in issue	10	Amortised cost	64,546	—		—	—	2,095		66,641	(105	)	66,536
Accruals, deferred income and other liabilities	1, 10	Amortised cost	45,907	53,895		—	—	124		99,926	—		99,926
Current tax liabilities		N/A	928	—		—	—	—		928	—		928
Liabilities under insurance contracts	9	N/A	85,667	—		—	—	—		85,667	(69	)	85,598
Provisions		N/A	4,011	—		—	—	—		4,011	284		4,295
Deferred tax liabilities	14	N/A	1,982	—		—	—	—		1,982	(368	)	1,614
Subordinated liabilities	10	Amortised cost	19,826	—		—	—	7,480		27,306	(1,445	)	25,861
Total liabilities			2,323,900	—		—	—	—		2,323,900	(1,694	)	2,322,206

For footnotes, see page 338.



					IFRS 9 reclassification to				Carrying amount post-reclassification	IFRS 9 remeasurement including expected credit losses		IFRS 9 carrying amount at 1 Jan 2018
		IAS 39 measurement category	IAS 39 carrying amount at 31 Dec 2017	Other changes in classification	Fair value through profit and loss	Fair value through other comprehensive income	Amortised cost		Carrying amount post-reclassification	IFRS 9 remeasurement including expected credit losses		IFRS 9 carrying amount at 1 Jan 2018
	Footnotes		$m	$m	$m	$m	$m		$m	$m		$m
Liabilities
Amount owed to HSBC undertakings		Amortised cost	2,571	—	—	—	—		2,571	—		2,571
Financial liabilities designated at fair value	2	FVPL	30,890	—	—	—	(5,402	)	25,488	—		25,488
Derivatives		Amortised cost	3,082	—	—	—	—		3,082	—		3,082
Debt securities in issue		Amortised cost	34,258	—	—	—	—		34,258	—		34,258
Accruals, deferred income and other liabilities	2	Amortised cost	1,269	—	—	—	75		1,344	—		1,344
Subordinated liabilities	2	Amortised cost	15,877	—	—	—	5,327		21,204	(1,065	)	20,139
Total liabilities			87,947	—	—	—	—		87,947	(1,065	)	86,882

Disclosure of effect on equity at date of initial application of IFRS 9



		IAS 39 carrying amount at 31 Dec 2017	IFRS 9 reclassification		Carrying amount post reclassification	IFRS 9 remeasurement including expected credit losses		Carrying amount at 1 January 2018
	Footnotes	$m	$m		$m	$m		$m
Equity
Called up share capital		10,160	—		10,160	—		10,160
Share premium account		10,177	—		10,177	—		10,177
Other equity instruments		22,250	—		22,250	—		22,250
Other reserves	12	7,664	(960	)	6,704	(61	)	6,643
Retained earnings	14	139,999	960		140,959	(1,545	)	139,414
Total shareholders equity		190,250	—		190,250	(1,606	)	188,644
Non-controlling interests		7,621	—		7,621	(41	)	7,580
Total equity		197,871	—		197,871	(1,647	)	196,224

For footnotes, see page 338.



Reconciliation for HSBC Holdings balance sheet at 31 December 2017 and 1 January 2018 (continued)
		IAS 39 carrying amount at 31 Dec 2017	IFRS 9 reclassification		Carrying amount post-reclassification	IFRS 9 remeasurement including expected credit losses	Carrying amount at 1 January 2018
	Footnotes	$m	$m		$m	$m	$m
Equity
Called up share capital		10,160	—		10,160	—	10,160
Share premium account		10,177	—		10,177	—	10,177
Other equity instruments		22,107	—		22,107	—	22,107
Other reserves		37,440	(59	)	37,381	—	37,381
Retained earnings		23,903	59		23,962	890	24,852
Total equity		103,787	—		103,787	890	104,677


1	$4,264 of available-for-sale assets have been reclassified as ‘Financial assets designated and otherwise mandatorily measured at fair value through profit or loss’ in accordance with IFRS 9.


2	As permitted by IFRS 9, fair value designations have been revoked for certain long-dated liabilities where the accounting mismatch will be better mitigated by undertaking fair value hedge accounting, resulting in reclassifications of $5,402m from 'Financial liabilities designated at fair value’ to ‘Subordinated liabilities’ measured at amortised cost.

Disclosure of effect on impairment allowances at date of initial application of IFRS 9



Reconciliation of impairment allowance under IAS 39 and provision under IAS 37 to expected credit losses under IFRS 9
		Reclassification to				Remeasurement		Total
		Fair value through profit and loss		Fair value through other comprehensive income	Amortised cost	Stage 3	Stage 1 & Stage 2	Total
	IAS 39 measurement category	$m		$m	$m	$m	$m	$m
Financial assets at amortised cost
IAS 39 impairment allowance at 31 Dec 2017								7,532
Cash and balances at central banks	Amortised cost (Loans and receivables)	—		—	—	—	3	3
Items in the course of collection from other banks	Amortised cost (Loans and receivables)	—		—	—	—	—	—
Hong Kong Government certificates of indebtedness	Amortised cost (Loans and receivables)	—		—	—	—	—	—
Loans and advances to banks	Amortised cost (Loans and receivables)	—		—	—	1	22	23
Loans and advances to customers	Amortised cost (Loans and receivables)	(31	)	—	—	629	1,261	1,859
Reverse repurchase agreements – non-trading	Amortised cost (Loans and receivables)	—		—	—	—	—	—
Financial investments	Amortised cost (Held to maturity)	—		—	3	—	13	16
Prepayments, accrued income and other assets	Amortised cost (Loans and receivables)	—		—	—	—	47	47
Expected credit loss allowance at 1 Jan 2018								9,480
Loan commitments and financial guarantee contracts
IAS 37 provisions at 31 Dec 2017								253
Provisions (loan commitments and financial guarantees)	N/A	N/A		N/A	N/A	74	210	284
Expected credit loss provision at 1 Jan 2018								537

Disclosure of effects of reclassification upon adoption of IFRS 9



Effects of reclassification upon adoption of IFRS 9
				Assuming no reclassification
		Carrying amount at 31 Dec 2018	Fair value at 31 Dec 2018	Fair value gains/(losses) recognised in profit or loss	Fair value gains/(losses) recognised in other comprehensive income		Interest revenue/(expense)
	Footnotes	$m	$m	$m	$m		$m
Reclassified from available-for-sale to amortised cost
Other financial assets held at amortised cost		5,781	5,876	N/A	(438	)	N/A
Reclassified from fair value through profit and loss to amortised cost or fair value though other comprehensive income
Debt securities in issue	15	1,939	1,823	60	237		(80	)
Subordinated liabilities	16	5,872	6,635	246	644		(323	)

For footnotes, see page 338.