BARCLAYS PLC

21 Goodwill and intangible assets

Accounting for goodwill and intangible assetsGoodwillGoodwill arising on the acquisition of subsidiaries represents the excess of the fair value of the purchase consideration over the fair value of the Group’s share of the assets acquired and the liabilities and contingent liabilities assumed on the date of the acquisition.Goodwill is reviewed annually for impairment, or more frequently when there are indications that impairment may have occurred. The test involves comparing the carrying value of a cash generating unit (CGU), including goodwill with the present value of the pre-tax cash flows, discounted at a rate of interest that reflects the inherent risks, of the CGU to which the goodwill relates, or the CGU's fair value if this is higher.Intangible assetsIntangible assets are initially recognised when they are separable or arise from contractual or other legal rights, the cost can be measured reliably and, in the case of intangible assets not acquired in a business combination, where it is probable that future economic benefits attributable to the assets will flow from their use.For internally generated intangible assets, only costs incurred during the development phase are capitalised. Expenditure in the research phase is expensed when it is incurred.Intangible assets are stated at cost (which is, in the case of assets acquired in a business combination, the acquisition date fair value) less accumulated amortisation and impairment, if any, and are amortised over their useful lives in a manner that reflects the pattern to which they contribute to future cash flows, generally using the amortisation periods set out below:Note:1Exceptions to the above rate relate to useful lives of certain core banking platforms that are assessed individually and, if appropriate, amortised over longer periods ranging from 10 to 15 years.

Assets at amortised cost and other investments

Intangible assets are reviewed for impairment when there are indications that impairment may have occurred. Intangible assets not yet

available for use are reviewed annually for impairment.

Notes:

1 Disposals pertain to fully amortised assets which are not in use.

2 Amortisation charge and impairment charge is part of Infrastructure, Administration and General expenses shown in Note 7.

Goodwill

Goodwill and Intangible assets are allocated to business operations according to business segments as follows:

Critical accounting estimates and judgements

Goodwill

Key areas involving a higher degree of judgement or estimation include:

Assets at amortised cost and other investments

The Group does not consider there to be a significant risk of a material adjustment to the carrying amount of goodwill in the next financial

year.

Testing goodwill for impairment involves a significant amount of judgement. Goodwill is allocated to CGUs for the purpose of impairment

testing. The review of goodwill for impairment involves calculating a value in use (VIU) valuation, which is compared to the carrying value

of a CGU associated with the goodwill to determine whether any impairment has occurred. This includes the identificationof independent

CGUs across the organisation and the allocation of goodwill to those CGUs.

The calculation of a value in use contains a high degree of uncertainty in estimating the future cash flows and the rates used to discount them.

Key judgements include determining the carrying value of the CGU, the cash flows and discount rates used in the calculation.

•The cash flow forecasts used by management involve judgement and are based upon a view of the prospects of the business and market

conditions at the point in time the assessment is prepared, including the potential effect of climate change. The estimation of cash flows is

sensitive to the periods for which detailed forecasts are available and to assumptions regarding long-term sustainable cash flows.

•The discount rates applied to the future cash flows also involve judgement. The discount rates used are compared to market participants to

ensure that they are appropriate and based on an estimated cost of equity for each CGU.

•The choice of a terminal growth rate used to determine the present value of the future cash flows of the CGUs is also a judgement that can

impact the outcome of the assessment. The terminal growth rate and discount rates used may vary due to external market rates and

economic conditions that are beyond management’s control, including the potential effect of climate change.

Further details of some of the key judgements are set out below.

2025 impairment review

The 2025 impairment review was performed during Q 4 2025, with the approach and analysis set out below.

Determining the carrying value of CGUs

The carrying value for each CGU is the sum of the tangible equity, goodwill and intangible asset balances associated with that CGU.

The Group manages the assets and liabilities of its CGUs with reference to the tangible equity of the respective businesses. That tangible

equity is derived from the level of risk weighted assets (RWAs) and capital required to be deployed in the CGU and therefore reflects its

relative risk, as well as the level of capital that management consider a market participant would be required to hold and retain to support

business growth.

Goodwill is initially allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the acquisition that generated it.

Goodwill is only reallocated if there is a change in its use or when reporting structures are altered in a way that changes the composition of

one or more cash generating units to which goodwill has been allocated. During H1 2025, Barclays Bank UK Group revised its internal

reporting structure to align with strategic changes and allocation of resources. As a result, a new reportable segment of Retail Banking has

replaced the previously reported Personal Banking and Barclaycard Consumer UK segments.

Cash flows

Thefive-year cash flows used in the calculation are based on the formally agreed medium-term plans approved by the Board. These are

prepared using macroeconomic assumptions which management consider reasonable and supportable, and reflect business agreed initiatives

for the forecast period. The macroeconomic assumptions underpinning the medium-term plan were determined during 2025 and management

has considered whether there are subsequent significant changes in those assumptions which would adversely impact the results of the

impairment review.

As required by IAS 36, estimates of future cash flows exclude cash inflows or outflows that are expected to arise from restructuring

initiatives where a constructive obligation to carry out the plan does not yet exist.

In line with prior year treatment, the Education, Social Housing and Local Authority (ESHLA) portfolio has been excluded from the

Business Banking CGU cash flows. This is a legacy loan portfolio which was previously within the Non-Core bank and was not part of the

business to which the goodwill relates. As such, the cash flows relating to this portfolio have been excluded from the Business Banking VIU

calculation.

Discount rates

IAS 36 requires that the discount rate used in a value in use calculation reflects the pre-tax rate an investor would require if they were to

choose an investment that would generate similar cash flows to those that the entity expects to generate from the asset. In determining the

discount rate, management identified the cost of equity associated with market participants that closely resemble the Group's CGUs. The cost

of equity has been used as the discount rate in the impairment assessment and applied to the post-tax cash flows of the CGU. This post-tax

method incorporates the impact of changing tax rates on the cash flows and is expected to produce the same VIU result as a pre-tax method

adjusted for varying tax rates. Using the resultant VIU, the equivalent pre-tax discount rate has been calculated. The cost of equity rate used

for all CGUs in this year’s calculation has increasedto reflect volatility in markets, an increase in risk free rate and a higher market risk

premium rate. The range of equivalent pre-tax discount rates applicable across the CGUs range from 15.2% to 19.6% (2024:14.7% to

19.2%).

Terminal growth rate

The terminal growth rate is used to estimate the effect of projecting cash flows to the end of an asset’s useful economic life. It is

management’s judgement that the cash flows associated with the CGUs will grow in line with the major economies in which the Group

operates. Inflation rates are used as an approximation of future growth rates and form the basis of the terminal growth rates applied. The

terminal growth rate used is 2.0% (2024:2.0%).

Assets at amortised cost and other investments

Outcome of goodwill and intangibles review

The Retail Banking CGU carries the majority of the Group’s goodwill balance, predominantly as a consequence of the Woolwich

acquisition. The goodwill within Retail Banking was £3,243 m (2024:£3,243 m), of which£2,501 m (2024:£2,501 m) was attributable to

Woolwich, and within Business Banking was£629 m (2024:£629 m), fully attributable to Woolwich.

The largest portion of the Group's intangible assets sits within the Barclays Investment Bank CGU, with an allocationof £1,751 m(2024:

£1,902 m).

Based on management's plans and assumptions the value in use exceeds the carrying value of the CGUs and no impairment has been

indicated in 2025.

The outcome of the impairment review for Retail Banking, Business Banking and Barclays US Consumer Bank are set out below:

Note:

1 For comparative purposes, the 2024 figures have been re-presented to reflect the cash-generating units within the new operating divisions introduced in the first half

of 2025. Goodwill related to Retail Banking, which was previously reported under Personal Banking and Barclaycard Consumer UK, has now been reclassified

accordingly.

All of the above CGUs have seen an increase in value in use in the period, which is mainly attributable to improved performance expectations.

Sensitivity of key judgements

Headroom is sensitive to possible adverse changes in the key assumptions that support the recoverable amount:

Cash flows: The medium-term plans used to determine the cash flows used in the VIU calculation rely on macroeconomic forecasts, including

interest rates, GDP and unemployment, and forecast levels of market and client activity. Interest rate assumptions impact planned cash flows

from both customer income and structural hedge contributions and therefore cash flow expectations are highly sensitive to movements in the

yield curve. The cash flows also contain assumptions with regard to the prudential and financial conduct regulatory environment which may be

subject to change. Given the current level of economic uncertainty, a 10% reduction in cash flows has been provided to show the sensitivity of

the outcome to a change in these key assumptions.

Discount rate: The discount rate should reflect the market risk-free rate adjusted for the inherent risks of the business it is applied to.

Management have identified discount rates for comparable businesses and consider these to be a reasonable estimate of a suitable market rate

for the profile of the business unit being tested. The risk that these discount rates may not be appropriate is quantified below and shows the

impact of a 100 bps change in the discount rate.

Terminal growth rate: The terminal growth rate is used to estimate the cash flows into perpetuity based on the expected longevity of the

CGU's businesses. The terminal growth rate is sensitive to uncertainties in the macroeconomic environment. The risk that using inflation data

may not be appropriate for its determination is quantified below and shows the impact of 100 bps change in the terminal growth rate.

Allocated capital rate: Tangible equity is allocated based on the level of risk weighted assets (RWAs) and capital required to be deployed in

the CGU, which is dependent on the relative risk of businesses. The capital rate used in determining the level of tangible equity allocated to the

CGU and its capital cash flows could move over time. The impact of a 50 bps increase in capital rate is quantified below.

The sensitivity of the value in use to key judgements in the calculations for certain CGUs holding goodwill balances is set out below:

Accruals, provisions, contingent liabilities and legal proceedings