Aviva plc: Adoption of Aviva Market Consistent Embedded Value (MCEV) methodology and impact on results
Summarised consolidated balance sheet – MCEV basis
| Reviewed 30 June 2008 £m |
Audited 31 December 2007 £m |
Audited 31 December 2006 £m |
|
|---|---|---|---|
| Assets | |||
| Goodwill | 3,048 | 3,082 | 2,910 |
| Acquired value of in-force business and intangible assets | 3,170 | 3,197 | 2,728 |
| Additional value of in-force long-term business1 | 6,542 | 7,758 | 6,698 |
| Interests in, and loans to, joint ventures | 2,588 | 2,576 | 2,795 |
| Interests in, and loans to, associates | 1,211 | 1,206 | 895 |
| Property and equipment | 996 | 942 | 904 |
| Investment property | 14,668 | 15,391 | 15,123 |
| Loans | 37,387 | 36,193 | 28,574 |
| Financial investments | |||
| Debt securities | 124,176 | 121,312 | 114,466 |
| Equity securities | 48,517 | 58,829 | 56,762 |
| Other investments | 38,476 | 36,269 | 33,050 |
| Reinsurance assets | 8,273 | 8,054 | 7,764 |
| Deferred tax assets | 249 | 590 | 1,199 |
| Current tax assets | 534 | 376 | 344 |
| Receivables and other financial assets | 10,750 | 8,619 | 8,098 |
| Deferred acquisition costs and other assets | 5,074 | 4,487 | 3,476 |
| Prepayments and accrued income | 3,183 | 2,986 | 2,585 |
| Cash and cash equivalents | 18,783 | 16,089 | 13,117 |
| Assets of operations classified as held for sale | 6,643 | 1,128 | – |
| Total assets | 334,268 | 329,084 | 301,488 |
| Equity | |||
| Ordinary share capital | 664 | 655 | 641 |
| Capital reserves | 4,516 | 4,494 | 4,460 |
| Other reserves | 1,601 | 1,179 | 530 |
| Shares held by employee trusts | (10) | (10) | – |
| Retained earnings | 5,244 | 6,338 | 5,195 |
| Additional retained earnings on an MCEV basis2 | 5,374 | 7,342 | 6,610 |
| Equity attributable to ordinary shareholders of Aviva plc | 17,389 | 19,998 | 17,436 |
| Preference share capital and direct capital instruments | 1,190 | 1,190 | 1,190 |
| Minority interests3 | 2,637 | 2,501 | 1,817 |
| Total equity | 21,216 | 23,689 | 20,443 |
| Liabilities | |||
| Gross insurance liabilities | 154,593 | 152,839 | 144,016 |
| Gross liabilities for investment contracts | 98,627 | 98,244 | 88,358 |
| Unallocated divisible surplus | 4,065 | 6,785 | 9,465 |
| Net asset value attributable to unitholders | 7,452 | 6,409 | 4,241 |
| Provisions | 2,398 | 1,937 | 2,850 |
| Deferred tax liabilities | 1,257 | 2,532 | 3,079 |
| Current tax liabilities | 1,125 | 1,225 | 1,301 |
| Borrowings | 13,373 | 12,657 | 12,137 |
| Payables and other financial liabilities | 19,720 | 18,060 | 11,364 |
| Other liabilities | 4,537 | 3,765 | 4,234 |
| Liabilities of operations classified as held for sale | 5,905 | 942 | – |
| Total liabilities | 313,052 | 305,395 | 281,045 |
| Total equity and liabilities | 334,268 | 329,084 | 301,488 |
The summarised consolidated balance sheet presented above is unaltered from the corresponding IFRS summarised consolidated balance sheet, with the exception of the following:
- Adding the excess of the Life MCEV, including minority interests, over the corresponding Life IFRS net assets represented as the additional value of in-force long-term business.
- Corresponding item within equity represented by the additional retained profit on an MCEV basis.
- Corresponding adjustments to minority interests.
The balance sheet has been restated for the conversion to MCEV, the change in accounting for latent claims and consolidation of funds. Details of the latter two changes are set out in the MCEV notes to the financial statements.
