What shall it profit a company if it loses its reputation?

Barclays Bank published its final results for 2008 and reported what a appears to be a healthy profit of £5.2bn after tax. However two items are worth a second look. Included in the profit is £2.4bn of gains on assets acquired from Lehman Brothers after the collapse. Marking to market can have odd effects where so-called 'bargain purchases' are made.

The second item is even more remarkable. The company recorded a £1.6bn gain on its loan notes. The reason for the gain is that Barclays credit worthiness has deteriorated since they were issued and the company is recording a profit because of it. When the EU adopted IFRS standards it originally forbade companies to treat their own financial instruments at 'fair value through the income statement'. However in 2005 the 'carve out' was removed and companies were allowed to designate some instruments as being treated at fair value.

What shall it profit a company if it loses its reputation? In Barclays' case it seems to be £1.6bn.