Chapter

Administered Accounts

Author(s):
International Monetary Fund
Published Date:
October 2017
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Report of Independent Auditors

To the Board of Governors of the International Monetary Fund

We have audited the accompanying financial statements of each of the entities of the International Monetary Fund listed in the table below (the “Administered Accounts”), which comprise the statements of financial position as of the dates listed in the table below and the related statements of comprehensive income and changes in resources and of cash flows for the periods listed in the table below.

Administered Accounts
Administered Account – Japan (Japan) (1)SCA-1/Deferred Charges Administered Account (SCA-1/Deferred Charges) (1)
Framework Administered Account for Technical Assistance Activities (Framework-TA) (1)Administered Account People’s Bank of China (People’s Bank of China) (1)
Framework Administered Account for Selected Fund Activities (Framework-SFA) (1)Interim Administered Account for Windfall Gold Sale Profits (Windfall Gold Sales Profits) (1)
Administered Account for Interim Holdings of Voluntary Contributions (Interim Holdings) (l)Interim Administered Account for Remaining Windfall Gold Sales Profits (Remaining Windfall Gold Sales Profits) (1)
Administered Account – Switzerland (Switzerland) (2)Post-EPCA/ENDA Interim Administered Account (Post-EPCA/ENDA) (1)
Supplementary Financing Facility Subsidy Account (SFF Subsidy) (1)Post-MDRI-II Interim Administered Account (“MAA”) (Post-MDRI-II) (3)
Post-SCA-2 Administered Account (Post-SCA-2) (1)
(1) As of and for the years ended April 30, 2017 and 2016
(2) As of April 30, 2017 and for the period from February 1, 2017 (date of inception) to April 30, 2017
(3) As of April 30, 2017 and 2016 and for the period from June 23, 2015 (date of inception) to April 30, 2016 and for the period from May 1, 2016 to February 1, 2017

We are independent of the Accounts in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United States of America, together with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants, and we have fulfilled our other ethical responsibilities in accordance with these requirements, respectively.

Responsibilities of Management and Those Charged With Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Accounts’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless management either intends to liquidate the Accounts or to cease operations or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Accounts’ financial reporting process.

Auditors’ Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error. Reasonable assurance is a high level of assurance but is not a guarantee that an audit will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We design audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error because fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

In making those risk assessments, we consider internal control relevant to the Accounts’ preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Accounts’ internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation, structure, and content of the financial statements, including disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

As part of an audit:

  • We exercise professional judgment and maintain professional skepticism throughout the audit.

  • We conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Accounts’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Accounts to cease to continue as a going concern.

  • We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies or material weaknesses in internal control that we identify during our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the Administered Accounts as of the dates listed in the table above, and the results of each of their operations and each of their cash flows for the periods listed in the table above in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Other Matter

Our audit was conducted for the purpose of forming an opinion on each of the Administered Account financial statements taken as a whole. The supplemental schedules listed on pages 86 to 88 are presented for purposes of additional analysis and are not a required part of the respective Administered Account financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the respective Administered Account financial statements. The information has been subjected to the auditing procedures applied in the audit of the respective Administered Account financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the respective Administered Account financial statements or to the respective Administered Account financial statements themselves and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. We also subjected the information to the applicable procedures required by the International Standards on Auditing. In our opinion, the information is fairly stated, in all material respects, in relation to the respective Administered Account financial statements taken as a whole.

June 23, 2017

Statements of financial position at April 30, 2017, and 2016

(In thousands of U.S. dollars)

JapanFramework—TAFramework—SFAInterim HoldingsSwitzerland
201720162017201620172016201720162017
Assets
Cash and cash equivalents132,232131,667569818262,054280,4857
Other assets8
Total assets132,232131,667569818262,054280,48578
Liabilities
Accounts payable30,55429,154
Other liabilities8
Total liabilities30,55429,1548
Resources132,232131,667569818231,500251,3317
Total liabilities and resources132,232131,667569818262,054280,48578
The accompanying notes are an integral part of these financial statements.The financial statements were approved by the Managing Director and the Director of Finance on June 23, 2017.
The accompanying notes are an integral part of these financial statements.The financial statements were approved by the Managing Director and the Director of Finance on June 23, 2017.
Christine Lagarde /s/Andrew Tweedie /s/
Managing DirectorDirector, Finance Department
SFF SubsidyPost-SCA-2SCA-1/ Deferred ChargesPeople's Bank of ChinaWindfall Gold Sales ProfitsRemaining Windfall Gold Sales ProfitsPost-EPCA/ENDAPost-MDRI-II
Note2017201620172016201720162017201620172016201720162017201620172016
Assets
Cash and cash equivalents90690541,03340,99034,99934,9625,0914,87237,68637,64678,53888,81985225
Interest receivable385324363913557312
Investments5168,416168,369
Total assets90690541,07140,99535,03134,966173,870173,33237,72137,65178,61188,83185225
Liabilities
Interest payable141141
Borrowings6170,000170,000
Total liabilities170,141170,141
Resources90690541,07140,99535,03134,9663,7293,19137,72137,65178,61188,83185225
Total liabilities and resources90690541,07140,99535,03134,966173,870173,33237,72137,65178,61188,83185225
The accompanying notes are an integral part of these financial statements.
The accompanying notes are an integral part of these financial statements.

Statements of comprehensive income and changes in resources for the financial years ended April 30, 2017, and 2016

(In thousands of U.S. dollars)

JapanFramework—TAFramework—SFAInterim HoldingsSwitzerland
Note2017201620172016201720162017201620171
Resources, beginning of year131,667131,4328188,323251,331280,14777
Investment income565235141,354507
Contributions (returned)/received(250)(7,509)141,367122,524100,296
Other income8
Operating expenses(162,552)(151,847)(8)
Operational income/(loss)565235(249)(7,505)(19,831)(28,816)100,296
Transfers7(7)(100,296)
Other comprehensive income
Total comprehensive income
(loss)/changes in resources565235(249)(7,505)(19,831)(28,816)(7)
Resources, end of year132,232131,667569818231,500251,3317
The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2017.

The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2017.

SFF SubsidyPost-SCA-2SCA-1/ Deferred ChargesPeople’s Bank of ChinaWindfall Gold Sales ProfitsRemaining Windfall Gold Sales ProfitsPost-EPCA/ENDAPost-MDRI-II
Note201720162017201620172016201720162017201620172016201720162017120161
Resources, beginning of year90590440,99540,97434,96634,9493,1913,26937,65138,09888,83197,5308585225
Investment Income511762165171,233618701915548
Contributions4,472
Interest expense on borrowings(170)(171)
Operational income11762165171,0634477019155484,472
Transfers7(525)(525)(466)(10,375)(8,747)(85)(225)(4,247)
Other comprehensive income
Total comprehensive income/ (loss) changes in resources1176216517538(78)70(447)(10,220)(8,699)(85)(225)225
Resources, end of year90690541,07140,99535,03134,9663,7293,19137,72137,65178,61188,83185225
The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2016, and for the period May 1, 2016, to February 1, 2017.

The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2016, and for the period May 1, 2016, to February 1, 2017.

Statements of cash flows for the financial years ended April 30, 2017, and 2016

(In thousands of U.S. dollars)

JapanFramework—TAFramework—SFAInterim HoldingsSwitzerland
2017201620172016201720162017201620171
Cash flows from operating activities
Total comprehensive income/(loss)565235(249)(7,505)(19,831)(28,816)(7)
Adjustments to reconcile total comprehensive income/(loss) to cash generated by operations
Interest income(565)(235)(1)(4)(1,354)(507)
Changes in other assets(8)
Changes in other liabilities1,4005208
Interest received565235141,354507
Net cash provided by/(used in) operating activities565235(249)(7,505)(18,431)(28,296)(7)
Net cash provided by investment activities
Net cash provided by financing activities
Net increase/(decrease) in cash and cash equivalents565235(249)(7,505)(18,431)(28,296)(7)
Cash and cash equivalents, beginning of year131,667131,4328188,323280,485308,78177
Cash and cash equivalents, end of year132,232131,667569818262,054280,4857
The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2017.

The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2017.

SFF SubsidyPost-SCA-2SCA-1/ Deferred ChargesPeople’s Bank of ChinaWindfall Gold Sales ProfitsRemaining Windfall Gold Sales ProfitsPost-EPCA/ENDAPost-MDRI-II
201720162017201620172016201720162017201620172016201720162017120161
Cash flows from operating activities
Total comprehensive income/(loss)1176216517538(78)70(447)(10,220)(8,699)(85)(225)225
Adjustments to reconcile total comprehensive income/(loss) to cash generated by operations
Interest income(1)(1)(76)(21)(65)(17)(969)(823)(70)(19)(155)(48)(1)
Interest expense170171
Realized losses/(gains)746(215)
Unrealized (gains)/losses(897)401
Interest received1143213717658916401994481
Interest paid(170)(170)
Net cash provided by (used in) operating activities11432137177620240(447)(10,281)(8,699)(85)(225)225
Cash flows from investing activities
Purchase of investments(18,656)(156,221)
Proceeds from sale of investments18,799156,844
Net cash provided by (used in) investment activities143623
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents114321371721982540(447)(10,281)(8,699)(85)(225)225
Cash and cash equivalents, beginning of year90590440,99040,96934,96234,9454,8724,04737,64638,09388,81997,5188585225
Cash and cash equivalents, end of year90690541,03340,99034,99934,9625,0914,87237,68637,64678,53888,81985225
The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2016, and for the period May 1, 2016, to February 1, 2017.

The accompanying notes are an integral part of these financial statements.

From inception to April 30, 2016, and for the period May 1, 2016, to February 1, 2017.

Notes to the financial statements for the financial years ended April 30, 2017, and 2016

1. Nature of operations

At the request of members, the International Monetary Fund (IMF) has established special-purpose accounts (the Administered Accounts) to administer contributed resources provided to fund financial and technical services consistent with the purposes of the IMF. The instruments establishing the Administered Accounts provide the terms and conditions, as agreed with the IMF and contributing members, under which the resources may be used. The assets of each account and each subaccount are separate from the assets of all other accounts of, or administered by, the IMF and are not to be used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1.1 Administered Account—Japan (Japan)

The account was established in March 1989 to administer resources made available by Japan—and, under a subsequent amendment, by other countries with Japan’s concurrence—that are to be used to assist certain members with overdue obligations to the IMF. The resources of the account are to be disbursed in amounts specified by Japan and to members designated by Japan. Effective March 5, 2008, the instrument governing the account was amended to allow the provision of assistance to these members in the context of an internationally agreed comprehensive package that integrates arrears clearance and subsequent debt relief. The account can be terminated by the IMF or by Japan at any time. Upon termination of the account, any remaining resources in the account are to be returned to Japan.

1.2 Framework Administered Account for Technical Assistance Activities (Framework—TA)

The account was established by the IMF in April 1995 to receive and administer contributed resources that are to be used to finance technical assistance activities of the IMF. During the financial year ended April 30, 2015, the account was terminated. The account is in the process of liquidation and any funds remaining in the account will either be refunded to the contributors, or at their request, transferred to the Framework Administered Account for Selected Fund Activities.

1.3 Framework Administered Account for Selected Fund Activities (Framework—SFA)

The account was established in March 2009 to administer externally contributed resources that are to be used to finance selected IMF activities, including the full range of IMF technical assistance activities provided to recipients.

The financing of selected Fund activities is implemented through the establishment and operation of subaccounts within the Framework—SFA. At April 30, 2017, there were 46 subaccounts, including one new subaccount that was established during the financial year; no subaccounts were terminated during the financial year (three new subaccounts were established and one subaccount was terminated in the financial year ended April 30, 2016). Disbursements are made from the respective subaccounts under the Framework—SFA to the General Resources Account (GRA) to reimburse the IMF for costs incurred in connection with activities financed by the respective subaccounts. Framework—SFA resources are to be used in accordance with terms and conditions established by the IMF, with the concurrence of contributors. Resources in Framework—SFA subaccounts may be transferred to other subaccounts if the terms and conditions of the subaccounts so provide.

The Framework—SFA or any subaccount thereof may be terminated by the IMF at any time with the concurrence of all contributors and the Managing Director. A subaccount may also be terminated by the contributor of the resources to the subaccount or, in the case of a subaccount comprising resources from more than one contributor, by all the contributors participating in the subaccount at the time of termination, provided that a contributor to such a subaccount may cease its own participation in the subaccount at any time without termination of the subaccount. The disposition of any balances, net of liabilities and commitments under the activities financed, is governed by the conditions agreed between the IMF and the contributor, or contributors in the case of a subaccount with more than one contributor. Absent such agreement, the balances are returned to the contributor(s) upon withdrawal from or termination of the subaccount.

1.4 Administered Account for Interim Holdings of Voluntary Contributions for Fund Activities (Interim Holdings)

The account was established in April 2010 to receive and hold externally contributed resources for an interim period until such time as they can be transferred to other Trusts or accounts administered by the IMF. The account may be terminated by the IMF at any time and uncommitted resources in the account at the time of termination are to be returned to the contributors.

1.5 Administered Account—Switzerland (Switzerland)

The account was established in February 2017 to facilitate the settlement of payments under the bilateral financing agreement between the Swiss National Bank (SNB) and the National Bank of Ukraine (NBU). The administered account will be terminated upon agreement between the SNB and the IMF, following consultations between the SNB and NBU.

1.6 Supplementary Financing Facility Subsidy Account (SFF Subsidy)

The account was established in December 1980 to assist low-income member countries to meet the costs of using resources made available through the IMF’s Supplementary Financing Facility and under the policy on exceptional access. All repurchases under these policies were due on or before January 31, 1991, and the final subsidy payments were approved in July 1991. However, one member (Sudan), overdue in the payment of charges to the IMF at April 30, 2017, remains eligible to receive previously approved subsidy payments of SDR 0.9 million at April 30, 2017, and 2016, when its overdue charges are settled. Accordingly, the account remains in operation and has retained amounts for payment to Sudan once the overdue charges are paid.

1.7 Post-SCA-2 Administered Account (Post-SCA-2)

The account was established in December 1999 for the temporary administration of resources transferred by members following the termination of the second Special Contingent Account (SCA-2) in the General Department of the IMF, prior to the final disposition of those resources in accordance with members’ instructions. The account will be terminated upon completion of its operations.

1.8 SCA-1/Deferred Charges Administered Account (SCA-1/Deferred Charges)

The account was established in March 2008 as an interim vehicle to hold and administer members’ refunds resulting from the distribution of certain SCA-1 balances and from the payment of deferred charges adjustments that had been made in respect of overdue charges attributed to Liberia. Following Liberia’s arrears clearance, members were given the option to temporarily deposit their refunds into this account pending their decisions as to the final disposition of those resources. The account will be terminated three years from the effective date of decisions establishing the account. This termination date was extended four times, most recently to March 13, 2018, by the IMF Executive Board at the request of the remaining contributors.

1.9 Administered Account People’s Bank of China (People’s Bank of China)

The account was established in June 2012 in order to administer and invest resources provided by the People’s Bank of China to support the IMF’s technical assistance and training programs. The account will be terminated upon completion of operations, or at such earlier time by the IMF in consultation with the People’s Bank of China. Once the obligation to repay the outstanding loan has been discharged and the final payment of interest has been made, any surplus remaining in the account will be transferred to the People’s Bank of China.

1.10 Interim Administered Account for Windfall Gold Sales Profits (Windfall Gold Sales Profits)

The account was established in October 2012 to temporarily hold and administer contributions representing all or a portion of members’ shares of the partial distribution of amounts in the IMF’s General Reserve attributable to windfall gold sales profits. Members were given the option to temporarily deposit the proceeds from the distribution into this account pending their decisions as to the final disposition of these resources. The account will be terminated on October 11, 2017, or as promptly as practicable following the receipt of instructions from all contributors regarding the distribution of the resources in the accounts, whichever is earlier. Any balances remaining in the account upon termination are to be transferred to the respective contributors.

1.11 Interim Administered Account for Remaining Windfall Gold Sales Profits (Remaining Windfall Gold Sales Profits)

The account was established in October 2013 to temporarily hold and administer contributions representing all or a portion of members’ shares of the final distribution of amounts in the IMF’s General Reserve attributable to remaining windfall gold sales profits. Members were given the option to temporarily deposit the proceeds from the distribution into this account pending their decisions as to the final disposition of these resources. The account will be terminated on October 9, 2018, or as promptly as practicable following the receipt of instructions from all contributors regarding the distribution of the resources in the accounts, whichever is earlier. Any balances remaining in the account upon termination are to be transferred to the respective contributors.

1.12 Post-EPCA/ENDA Interim Administered Account (Post-EPCA/ENDA)

The account was established in January 2014 to temporarily hold and administer resources transferred by members in the context of the termination of the Post-Conflict and Natural Disaster Emergency Assistance Subsidy Account, prior to the final disposition of those resources in accordance with members’ instructions. The account was terminated on January 27, 2017, and liquidated on May 1, 2017.

1.13 Post-MDRI-II Interim Administered Account (Post-MDRI-II)

The account was established in June 2015 to temporarily hold and administer resources transferred by members in the context of the termination of the Multilateral Debt Relief Initiative-II Trust, prior to the final disposition of those resources in accordance with members’ instructions. The account was liquidated upon completion of all transfers on February 1, 2017.

2. Basis of preparation and measurement

The financial statements of the Administered Accounts are prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). The financial statements have been prepared under the historical cost convention, except for the revaluation of financial instruments at fair value through profit or loss.

2.1 Unit of account

2.1.1 Japan, Framework—TA, Framework—SFA, Interim Holdings, and Switzerland

The functional and reporting currency of these accounts is the U.S. dollar. All transactions and operations of these accounts, including the transfers to and from these accounts, are denominated in U.S. dollars. Contributions denominated in other currencies are converted into U.S. dollars upon receipt of the funds.

2.1.2 SFF Subsidy, Post-SCA-2, SCA-1/Deferred Charges, People’s Bank of China, Windfall Gold Sales Profits, Remaining Windfall Gold Sales Profits, Post-EPCA/ENDA, and Post-MDRI-II

The financial statements for these accounts are presented in SDRs, which is the IMF’s unit of account. The value of the SDR is determined daily by the IMF by summing specific amounts of the basket currencies in U.S. dollar equivalents on the basis of market exchange rates. Contributions denominated in other currencies are converted into the component currencies in the SDR basket upon receipt of the funds.

The IMF reviews the composition of the SDR valuation basket at a minimum of five-year intervals. The latest review was completed in November 2015 and the Chinese renminbi was included in the SDR valuation basket effective October 1, 2016. The specific amounts of the currencies in the SDR basket were as follows:

SDR basket currencyOctober 1, 2016 to April 30, 2017Prior to October 1, 2016
Chinese renminbi1.0174
Euro0.386710.423
Japanese yen11.90012.1
Pound sterling0.0859460.111
U.S. dollar0.582520.660

At April 30, 2017, 1 SDR was equal to US$1.371020 (US$1.41733 at April 30, 2016). The next review of the method of valuation of the SDR will take place by September 30, 2021, unless developments in the interim justify an earlier review.

2.2 Use of estimates and judgment

The preparation of financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

Information about the most significant estimates and critical judgments used in applying accounting policies is described in Note 3.3.

3. Summary of significant accounting policies

3.1 New and revised International Financial Reporting Standards and interpretations

3.1.1 Amendments to existing standards that became effective in the financial year ended April 30, 2017

The following amendments to existing standards issued by the IASB became effective in the financial year ended April 30, 2017. These amendments have no material impact on the Administered Accounts’ financial statements:

Amendments to IFRS 7 “Financial Instruments: Disclosures,” issued in September 2014 and effective for annual periods starting on or after January 1, 2016.

Amendments to IFRS 11 “Joint Arrangements,” issued in May 2014 and effective for annual periods starting on or after January 1, 2016.

Amendments to IFRS 12 “Disclosure of Interests in Other Entities,” issued in December 2014 and effective for annual periods starting on or after January 1, 2016.

Amendments to IAS 1 “Presentation of Financial Statements,” issued in December 2014 and effective for annual periods starting on or after January 1, 2016.

Amendments to IAS 28 “Investments in Associates and Joint Ventures,” issued in December 2014 and effective for annual periods starting on or after January 1, 2016.

3.1.2 New standard to be adopted in future years

The following new standard has been issued by the IASB and will be effective for annual periods starting on or after January 1, 2018:

In July 2014, the IASB published the complete version of IFRS 9 “Financial Instruments,” which replaced most of the guidance in IAS 39 “Financial Instruments: Recognition and Measurement.” The standard requires financial assets to be classified at fair value through profit or loss, fair value through other comprehensive income, or amortized cost on the basis of the entity’s business model for managing the assets and the contractual cash flow characteristics of the financial asset. No changes were introduced for the classification and measurement of financial liabilities except for financial liabilities designated at fair value through profit or loss. For these financial liabilities, changes in the fair value due to the changes in an entity’s own credit risk must be recognized in other comprehensive income. The incurred loss model of IAS 39 has been replaced by a forward-looking expected credit loss impairment model. The impact of the adoption of IFRS 9 on the Administered Accounts’ financial statements is being assessed.

3.1.3 New standards and amendments to existing standards effective in future years that are not expected to have a material impact

The following new standards and amendments to existing standards issued by the IASB will become effective in future financial years. These standards and amendments are not expected to have a material impact on the Administered Accounts’ financial statements:

Amendments to IFRS 12 “Disclosure of Interests in Other Entities,” issued in December 2016 and effective for annual periods starting on or after January 1, 2017.

IFRS 15 “Revenue from Contracts with Customers,” issued in May 2014 and effective for annual periods starting on or after January 1, 2018.

Amendments to IAS 7 “Statement of Cash Flows,” issued in January 2016 and effective for annual periods starting on or after January 1, 2017.

Amendments to IAS 28 “Investments in Associates and Joint Ventures,” issued in December 2016 and effective for annual periods starting on or after January 1, 2018.

3.2 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits and other highly liquid short-term investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

3.3 Investments

Investments are held in the People’s Bank of China account, which measures fixed-term deposits (FTDs) at amortized cost, and has designated the investments in fixed-income securities as financial assets held at fair value through profit or loss because they are managed and their performance is evaluated on a fair value basis. Such designation may be made only upon initial recognition and cannot subsequently be changed. The designated assets are carried at fair value in the statements of financial position, with changes in fair value included in the statements of comprehensive income in the period in which they arise. The valuation techniques to determine fair value are described in Note 5.

3.3.1 Recognition

Investments are recognized on the trade date at which the People’s Bank of China account becomes a party to the contractual provisions of the instrument.

3.3.2 Derecognition

Investments are derecognized on the trade date when the contractual rights to the cash flows from the asset expire, or when substantially all the risks and rewards of ownership of the investment are transferred.

3.3.3 Investment income

Investment income comprises interest income, realized gains and losses, and unrealized gains and losses, including currency valuation differences arising from exchange rate movements against the functional currency. Interest income is recognized on an accrual basis under the effective interest rate method.

3.4 Borrowings

The People’s Bank of China account borrows from the contributing member for the purpose of generating investment income to support the activities of the Framework—SFA account. All borrowings are carried at amortized cost.

3.5 Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market.

A three-level fair value hierarchy is used to determine fair value under which financial instruments are categorized based on the priority of the inputs to the valuation technique. The fair value hierarchy has the following levels:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., prices) or indirectly (i.e., derived from prices); and

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When the inputs used to measure the fair value of an asset or liability fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest-level input that is significant to the fair value measurement of the instrument in its entirety. Thus, a Level 3 fair value measurement may include inputs that are both observable and unobservable.

For the Administered Accounts’ short-term financial assets and liabilities, the carrying value at April 30, 2017, and 2016, approximates the fair value. The carrying value of borrowings accounted for at amortized cost represents a reasonable estimate of their fair value.

3.6 Contributions

Bilateral contributions are recognized as income after the achievement of specified conditions and are subject to the bilateral agreements stipulating how the resources are to be used.

3.7 Operating expenses

Operating expenses consist of reimbursements to the IMF for program and administrative costs incurred on behalf of technical assistance activities for select accounts, as agreed between the IMF and contributing members to the Administered Accounts.

3.8 Foreign currency translation

Transactions in currencies other than the reporting currency are recorded at the rate of exchange on the date of the transaction. Exchange differences arising from the settlement of transactions at rates different from those on the date of the transactions are included in the determination of total comprehensive income.

3.9 Administrative expenses

The expenses of conducting the activities of the Administered Accounts are paid by the IMF and partial reimbursements are made by selected accounts. For Framework—SFA Account reimbursements of US$10.7 million and US$9.9 million are included in operating expenses in the statements of comprehensive income and changes in resources during the financial years ended April 30, 2017, and 2016, respectively.

4. Financial risk management

In administering contributed resources and funding financial and technical services, the Administered Accounts have minimal exposure to credit, liquidity, and market risks.

4.1 Credit risk

Credit risk on investment activities represents the potential loss that the Administered Accounts may incur if obligors and counterparties default on their contractual obligations. Credit risk is minimized by holding resources at the Bank for International Settlements (BIS), an international financial institution that provides financial services to central banks and other international financial institutions.

4.2 Liquidity risk

Liquidity risk is the risk of non-availability of resources to meet financing needs and obligations. Liquidity risk is monitored to ensure that upcoming payments or transfers can be met from the Administered Accounts’ cash and highly liquid investments. For the People’s Bank of China account, the principal resources are invested and the investment proceeds are held in currencies to ensure that the account has sufficient liquidity to transfer up to US$2 million annually to the Framework—SFA account. The maturity of the investments matches the repayment of the principal to the People’s Bank of China due in July 2017.

4.3 Market risk

Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate because of changes in market prices. Market risk includes interest rate risk, exchange rate risk, and other price risks.

4.3.1 Interest rate risk

Interest rate risk is the risk that future cash flows will fluctuate because of changes in market interest rates. The People’s Bank of China account invests in the BIS medium-term investments (MTIs), and the intent is to hold them until maturity. Prior to maturities of the MTIs, their carrying value fluctuates. A 10 basis point increase and a 10 basis point decrease in the average effective yields at April 30, 2017, would result in a loss and gain, respectively, of SDR 0.06 million or approximately 0.04 percent of the portfolio (SDR 0.2 million or approximately 0.1 percent at April 30, 2016).

4.3.2 Exchange rate risk

Exchange rate risk is the risk that the entity’s financial position and cash flows will be affected by fluctuations in prevailing foreign currency exchange rates. Exchange rate risk is managed, to the extent possible, by holding all financial assets and liabilities in the reporting currency designated for each of the accounts or, in the case of accounts whose unit of account is the SDR, in the constituent currencies included in the SDR valuation basket. The exchange rate risk on investments held by the People’s Bank of China account is managed by investing in MTIs and FTDs denominated in the constituent currencies included in the SDR’s valuation basket with the relative amount of each currency matching its weight in the SDR basket. In addition, the cash holdings are adjusted as needed in order to offset the effect of exchange rate movements against the SDR.

The value of the SDR is the sum of the market values, in U.S. dollar equivalents, of the predetermined amounts of the currencies in the SDR valuation basket (see Note 2). The effective share of each currency in the valuation of the SDR fluctuates daily and depends on the prevailing exchange rate at noon in the London market against the U.S. dollar on that day. The effect on the investment portfolio of a 5 percent increase or decrease in the market exchange rates of each of the currencies included in the SDR valuation basket against the SDR, for the People’s Bank of China account, at April 30, 2017, and 2016, was as follows:

5 percent increase in exchange rate5 percent decrease in exchange rate
2017201620172016
(Gain/(loss) in millions of SDRs)
Chinese renminbi(0.9)N/A1.0N/A
Euro(2.5)(2.8)2.83.1
Japanese yen(0.6)(0.6)0.70.7
Pound sterling(0.7)(0.9)0.71.0
U.S. dollar(3.5)(3.9)3.94.3

The sensitivity analyses are based on a change in one market exchange rate, while holding other currencies constant, so that the effects of correlation between the market exchange rates of constituent currencies are excluded.

5. Investments

Investments in the People’s Bank of China account consisted of MTIs, which are measured at fair value, and fixed-term deposits, which are measured at amortized cost and approximate fair value. The investments of the People’s Bank of China account consisted of the following, at April 30, 2017, and 2016:

20172016
(In thousands of SDRs)
Fixed-term deposits18,346
Fixed-income securities150,070168,369
Total168,416168,369

The fixed-term deposits and fixed-income securities mature in financial year 2018. The fair value of MTIs, which are not traded in an active market, is determined on the basis of a compilation of significant observable market information such as recently executed trades in securities of the issuer or comparable issuers and yield curves. The investments are categorized as Level 2 based on the fair value hierarchy. Investment income for the Administered Accounts consisted of interest income only, except for the People’s Bank of China account, whose investment income comprised the following for the financial years ending April 30, 2017, and 2016:

20172016
(In millions of SDRs)
Interest income0.90.8
Net realized (losses)/gains(0.6)0.3
Net unrealized gains/(losses)0.9(0.5)
Total1.20.6

6. Borrowings

The People’s Bank of China account was funded by a SDR 170 million loan from the People’s Bank of China on July 2, 2012. The loan is to be repaid in one installment within 90 days following the fifth anniversary date of the deposit. The interest on the loan is one-tenth of 1 percent per annum, payable annually, but only if the net investment earnings on the corresponding investment exceed that amount per annum.

7. Transfer of resources

The Switzerland account transfers amounting to US$100.3 million consist of the settlement of resources contributed by Swiss National Bank and payments made by the National Bank of Ukraine under the bilateral financing agreement. Transfer of resources between other accounts and Trusts administered by the IMF during the financial year ended were as follows:

Transfer fromTransfer to20172016
(In millions of SDR)
People’s Bank of China accountFramework—SFA0.50.5
Windfall Gold Sales ProfitsPoverty Reduction and Growth (PRG) Trust0.5
Remaining Windfall Gold Sales ProfitsPRG Trust10.48.7
Post-EPCA/ENDAIndia’s SDR account0.1
Post-MDRI-IICatastrophe Containment and Relief Trust0.24.2

Schedule 1: Post-SCA-2, SCA-1/Deferred Charges, Windfall Gold Sales Profits, Remaining Windfall Gold Sales Profits, Post-EPCA/ENDA, and Post-MDRI-II

Balances, contributions, interest earned, and transfers for the financial year ended April 30, 2017

(In thousands of SDRs)

MemberBeginning balanceContributionsInterest earnedTransfersEnding balance
Post-SCA-2
Dominican Republic1,19321,195
Jordan1,35431,357
Trinidad and Tobago2,91052,915
Vanuatu5858
Venezuela, República Bolivariana de35,4806635,546
Total Post-SCA-240,9957641,071
SCA-1/Deferred Charges
Brazil34,9666535,031
Total SCA-1/Deferred Charges34,9666535,031
Windfall Gold Sales Profits
Brazil12,5262312,549
Costa Rica4831484
Dominican Republic6461647
Grenada3434
Indonesia6,128116,139
Ireland3,70673,713
Lebanon7852787
South Africa5,507105,517
Venezuela, República Bolivariana de7,836157,851
Total Windfall Gold Sales Profits37,6517037,721
Remaining Windfall Gold Sales Profits
Brazil31,2925831,350
Costa Rica1,20921,211
Dominican Republic1,61221,614
Equatorial Guinea, Republic of3851386
Ghana2,71662,722
Indonesia15,3082815,336
Ireland9,259179,276
Lebanon1,96141,965
Papua New Guinea9682970
Singapore10,36510(10,375)
South Africa13,7562513,781
Total Remaining Windfall Gold Sales Profits88,831155(10,375)78,611
Post-EPCA/ENDA
India85(85)
Total Post-EPCA/ENDA85(85)
Post-MDRI-II
Singapore225(225)
Total Post-MDRI-II225(225)

Schedule 2 Japan, Framework—TA, and Framework—SFA

Cumulative contributions and disbursements at April 30, 2017, and 2016

20172016
AccountCumulative contributions1Cumulative disbursements2Cumulative contributions1Cumulative disbursements2
(In millions of U.S. dollars)
Japan135.282.4135.282.4
Framework—TA3203.9209.3204.2209.3
Africa Regional Technical Assistance Centers Subaccount37.438.237.438.2
Australia Technical Assistance Subaccount5.25.45.25.4
Australia—IMF Scholarship Program for Asia Subaccount5.55.65.55.6
Belgium Technical Assistance Subaccount4.44.44.44.4
Canadian Technical Assistance Subaccount8.68.78.68.7
Central Africa Regional Technical Assistance Center Subaccount15.315.515.315.5
China Technical Assistance Subaccount0.40.40.40.4
Denmark Technical Assistance Subaccount6.36.76.36.7
European Commission Technical Assistance Subaccount for METAC1.11.21.11.2
European Investment Bank Technical Assistance Subaccount1.21.21.21.2
FIRST Technical Assistance Subaccount8.48.58.48.5
French Technical Assistance Subaccount1.20.71.20.7
Islamic Development Bank Technical Assistance Subaccount0.50.50.50.5
Italy Technical Assistance Subaccount3.64.03.64.0
Japan Advanced Scholarship Program Subaccount19.320.019.320.0
Middle East Regional Technical Assistance Center Subaccount11.011.111.111.1
Pacific Financial Technical Assistance Centre Subaccount13.113.213.113.2
Rwanda_Macroeconomic Management Capacity Subaccount1.51.61.51.6
Spain Technical Assistance Subaccount0.81.00.81.0
Sweden Technical Assistance Subaccount1.51.61.51.6
Switzerland Technical Assistance Subaccount17.818.917.818.9
Technical Assistance Subaccount for Iraq5.86.25.86.2
Technical Assistance Subaccount to Support Macroeconomic and Financial Policy Formulation and Management3.63.63.63.6
The Netherlands Technical Assistance Subaccount14.915.014.915.0
The United Kingdom DFID Technical Assistance Subaccount15.816.015.816.0
Framework—SFA41,097.3868.1955.9705.6
Africa Regional Technical Assistance Center South (AFRITAC South) Subaccount52.449.950.138.1
Africa Regional Technical Assistance Center West 2 Subaccount29.017.428.79.9
Africa Training Institute Subaccount for Selected Fund Activities20.813.314.89.4
African Development Bank Subaccount for Selected Fund Activities1.5
Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Subaccount47.539.643.835.3
Belgium Subaccount for Selected Fund Activities10.68.512.36.4
Caribbean Regional Technical Assistance Center (CARTAC) Subaccount60.554.051.143.7
Central African Regional Technical Assistance Center (AFRITAC Central) Subaccount32.031.032.024.7
Central America, Panama, and the Dominican Republic Technical Assistance Center (CAPTAC-DR) Subaccount53.545.049.739.3
Denmark Subaccount for Selected Fund Activities3.12.72.52.2
East Africa Regional Technical Assistance Center (AFRITAC East) Subaccount58.756.054.346.9
European Commission Subaccount for Selected Fund Activities38.134.333.626.9
European Investment Bank Subaccount for Selected Fund Activities0.30.3
Externally Financed Appointee Subaccount8.75.76.73.6
Financial Access Survey Subaccount for Selected Fund Activities2.72.02.31.6
Germany Subaccount for Selected Fund Activities0.50.30.50.3
Government of Australia Subaccount for Selected Fund Activities0.90.60.70.5
Government of Canada Subaccount47.931.746.321.1
IMF-Middle East Center for Economics and Finance Subaccount for Selected Fund Activities30.029.025.624.4
International Forum of Sovereign Wealth Funds Subaccount1.71.71.71.7
Islamic Development Bank Subaccount0.50.5
Japan Subaccount for Selected Fund Activities229.9181.7207.2158.8
Kingdom of the Netherlands–Netherlands Subaccount for Selected Fund Activities6.23.42.92.7
Korea Subaccount for Selected Fund Activities2.30.15.00.1
Kuwait Subaccount for Selected Fund Activities2.82.62.82.2
Liberia Macro-Fiscal Subaccount4.13.64.13.1
Managing Natural Resource Wealth Topical Trust Fund Subaccount28.620.722.717.3
Mauritius Subaccount for Selected Fund Activities5.0
Middle East Regional Technical Assistance Center (METAC) Subaccount25.319.618.516.2
Norway Subaccount for Selected Fund Activities8.17.08.36.8
Pacific Financial Technical Assistance Center (PFTAC) Subaccount31.027.225.322.4
People’s Republic of China Subaccount0.90.4
Republic of South Sudan Macroeconomic Capacity Building8.87.58.16.1
Somalia Trust Fund for Capacity Development in Macroeconomic Policies and Statistics Subaccount8.13.55.61.5
South Asia Training and Technical Assistance Center Subaccount20.85.10.40.2
Subaccount for the Administration of Selected Smaller-Scale Capacity Building Activities10.66.87.26.1
Switzerland Subaccount for Selected Fund Activities38.923.632.019.2
Tax Administration Diagnostic Assessment Tool Subaccount7.55.64.84.0
Tax Policy and Administration Topical Trust Fund Subaccount41.627.727.220.0
The Socialist People’s Libyan Arab Jamahiriya Subaccount for Selected Fund Activities2.51.42.51.3
United Arab Emirates Subaccount for Selected Fund Activities0.40.30.40.3
United Kingdom Department for International Development Subaccount for Selected Fund Activities44.339.237.032.8
United States Subaccount for Selected Fund Activities6.66.16.95.7
West Africa Regional Technical Assistance Center (AFRITAC West) Subaccount41.740.140.633.6
World Bank Subaccount for Selected Fund Activities25.512.324.19.1
Components may not sum exactly to totals because of rounding.

Net of refunds of contributions to donors owing to termination of projects financed by resources in the Administered Account and transfers between subaccounts within the Framework—SFA.

Disbursements had been made from contributed resources as well as from interest earned on these resources, and include reimbursements, in some cases, for payments made previously.

All subaccounts except the French Technical Assistance Subaccount have been liquidated as of April 30, 2017.

The Sweden Subaccount for Selected Fund Activities had yet to receive any funds as of April 30, 2017.

Components may not sum exactly to totals because of rounding.

Net of refunds of contributions to donors owing to termination of projects financed by resources in the Administered Account and transfers between subaccounts within the Framework—SFA.

Disbursements had been made from contributed resources as well as from interest earned on these resources, and include reimbursements, in some cases, for payments made previously.

All subaccounts except the French Technical Assistance Subaccount have been liquidated as of April 30, 2017.

The Sweden Subaccount for Selected Fund Activities had yet to receive any funds as of April 30, 2017.

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