Chapter

Appendix VIII Financial Statements of the General Department, SDR Department, Supplementary Financing Facility Subsidy Account, Trust Fund, and Staff Retirement Plan

Author(s):
International Monetary Fund
Published Date:
September 1986
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Report of the External Audit Committee

Washington, D.C.

June 27, 1986

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund we have audited the financial statements of the Fund for the year ended April 30, 1986, covering the

  • —General Department (including the General Resources Account, Borrowed Resources Suspense Accounts, and Special Disbursement Account),
  • —SDR Department, and
  • —Accounts administered by the Fund, which consist of the Supplementary Financing Facility Subsidy Account and the Trust Fund.

The audit was conducted in accordance with international auditing standards and, accordingly, included reviews of accounting and control systems, tests of accounting records, evaluation of the extent and results of work performed by the Internal Auditor, and other audit procedures.

Audit Opinion

In our opinion, the financial statements of the General Department (including the related supplemental schedules one through four), the SDR Department, and the Accounts administered by the Fund have been prepared in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding year, and give a true and fair view of the respective financial positions and the allocations and holdings of SDRs as at April 30, 1986, and of the financial results of operations and transactions during that year.

External Audit Committee

/s/ Jay M. Weinstein, Chairman (United States)

/s/ Mohamad A. Zawawi (Jordan)

/s/ Gilton Bazilio Chiwaula (Malawi)

INTERNATIONAL MONETARY FUND

General Department

Balance Sheet

as at April 30, 1986

(In thousands of SDRs) (Note 1)

19861985
ASSETS
GENERAL RESOURCES ACCOUNT
Currencies and Securities (Notes 2 and 5)97,863,02695,994,219
SDR Holdings (Note 3)2,721,6424,615,747
Gold Holdings (Note 4)3,620,3963,620,396
Borrowed Resources Held in Suspense635,254203,407
Charges Receivable and Accrued (Note 5)848,943932,071
Accrued Interest on SDR Holdings48,10097,116
Other Assets19,12623,489
Total General Resources Account105,756,487105,486,445
SPECIAL DISBURSEMENT ACCOUNT
Currency Deposits Pending Investment68
Interest-Earning Deposits436,426
Accrued Income on Investments4,677
Total Special Disbursement Account441,171
Total General Department106,197,658105,486,445
QUOTAS, RESERVES, LIABILITIES, AND
SPECIAL DISBURSEMENT ACCOUNT RESOURCES
GENERAL RESOURCES ACCOUNT
QUOTAS
Subscriptions of Members89,305,05089,301,800
RESERVES (Note 6)1,122,0511,043,919
LIABILITIES
Borrowing (Note 7)14,556,47414,202,990
Remuneration Payable (Note 5)316,728413,789
Accrued Interest on Borrowing279,035397,076
Other Liabilities and Deferred Credits (Note 5)177,149126,871
Total General Resources Account105,756,487105,486,445
SPECIAL DISBURSEMENT ACCOUNT
Accumulated Resources441,171
Total General Department106,197,658105,486,445
The accompanying notes and Schedules 1-4 are an integral part of the financial statements.
The accompanying notes and Schedules 1-4 are an integral part of the financial statements.
/s/W. O. Habermeier/s/J. de larosiere
TreasurerManaging Director

INTERNATIONAL MONETARY FUND

General Department

Statement of Income and Expense

for the year ended April 30, 1986

(In thousands of SDRs) (Note 1)

GENERAL RESOURCES ACCOUNT
19861985
OPERATIONAL INCOME
Periodic charges (Note 5)2,801,5773,025,565
Special charges (Note 5)2,316
Deduct: Income deferred (Note 5)64,25356,417
2,739,6402,969,148
Interest on SDR holdings263,205478,295
Service charges19,70430,299
Other6,9324,317
3,029,4813,482,059
OPERATIONAL EXPENSE
Remuneration (Note 5)1,452,1031,721,202
Interest on borrowing, net of income from temporary investments held in
Borrowed Resources Suspense Accounts (SDR 15,854 in 1986 and
SDR 10,571 in 1985)1,275,8021,566,518
Other2
2,727,9053,287,722
NET OPERATIONAL INCOME301,576194,337
ADMINISTRATIVE EXPENSE (Note 9)
Personnel147,960149,583
Travel25,64025,066
Other, net49,44049,008
Fixed property (Note 1)404535
TOTAL ADMINISTRATIVE EXPENSE223,444224,192
NET INCOME (LOSS) OF GENERAL RESOURCES
ACCOUNT78,132(29,855)
SPECIAL DISBURSEMENT ACCOUNT
Income earned on investments14,113
Net change in SDR value of currency and deposits held
pending investment1,069
NET INCOME OF SPECIAL DISBURSEMENT
ACCOUNT13,044
The accompanying notes and Schedules 1–4 are an integral part of the financial statements.
The accompanying notes and Schedules 1–4 are an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

General Department

Statement of Changes in Reserves and Resources

for the year ended April 30, 1986

(In thousands of SDRs) (Note 1)

RESERVES—GENERAL RESOURCES ACCOUNT
19861985
SPECIAL RESERVE (Note 6)
Balance at beginning of the year678,339708,194
Net income (loss)78,132(29,855)
Balance at end of the year756,471678,339
GENERAL RESERVE (Note 6)
Balance at beginning and end of the year365,580365,580
TOTAL RESERVES OF GENERAL RESOURCES
ACCOUNT1,122,0511,043,919
RESOURCES—SPECIAL DISBURSEMENT ACCOUNT
19861985
Balance at beginning of the year
Transfers from Trust Fund424,583226,273
Transfers from (to) SFF Subsidy Account (net)3,544(226,273)
428,127
Net income13,044
TOTAL RESOURCES OF SPECIAL DISBURSEMENT
ACCOUNT441,171
The accompanying notes and Schedules 1–4 are an integral part of the financial statements.
The accompanying notes and Schedules 1–4 are an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

General Department

Notes to the Financial Statements

General Department

Under the Articles of Agreement, the General Department consists of the General Resources Account, the Special Disbursement Account, and the Investment Account. The Investment Account had not been activated at April 30, 1986. The General Department also includes Borrowed Resources Suspense Accounts, the establishment of which was authorized by the Executive Board in May 1981.

General Resources Account

Assets held in the General Resources Account comprise (i) currencies of the Fund’s member countries (including securities), (ii) SDR holdings, and (iii) gold.

Each member has been required to pay to the Fund the amount of its initial quota and subsequent increases partly in the member’s own currency and the remainder in the form of reserve assets, except that for the increases proposed in 1978, members were permitted to pay the entire increase in their own currencies. A member’s quota cannot be increased until it consents to the increase and pays the subscription in full.

The Fund makes its resources available to its members by selling SDRs or currencies to members in exchange for their own currency in accordance with Fund policies on the use of its resources. Use of the Fund’s resources by a member is dependent on the member having a balance of payments need.

When members make purchases, they undertake to repurchase, within the periods specified by the Fund, the Fund’s holdings of their currencies by the payment to the Fund of SDRs or the currencies of other members specified by the Fund. The Fund’s policies on the use of its resources, which indicate the time periods for which purchases may be outstanding, are intended to assure that use of its resources is temporary and will be reversed within time periods specified by the Fund.

The composition of the Fund’s holdings of members’ currencies changes as a result of the Fund’s operations and transactions, including purchase and repurchase transactions in currencies as noted above. The currency holdings reflect both the counterpart of purchases by those members that have a need to use the Fund’s resources, and also the currencies of those members whose balance of payments and reserve positions are determined by the Fund on a quarterly basis to be sufficiently strong for their currencies to be used in all the Fund’s operations and transactions in accordance with the policies of the Fund.

A member has a reserve tranche in the Fund to the extent that the Fund’s holdings of its currency, excluding holdings which reflect the member’s use of Fund credit, are less than the member’s quota. A member’s reserve tranche is regarded as a part of the member’s external reserves and a member may purchase up to the amount of its full reserve tranche at any time. Reserve tranche purchases are not regarded as a use of Fund credit.

Members may make use of Fund resources under various policies and the amount of such use is related to a member’s quota in the Fund. Under the credit tranche policy, credit is at present made available to members in a range consisting of four tranches or segments each equal to 25 percent of a member’s quota. A first credit tranche purchase is defined as one that raises the Fund’s holdings of a member’s currency in the credit tranche from 0 to 25 percent of quota. Subsequent purchases are made in three successive tranches, each equal to 25 percent of quota, to a level of no more than 100 percent of quota. Purchases in these three tranches are referred to as upper credit tranche purchases. Higher conditionality accompanies the use of Fund credit in the upper tranches.

Members experiencing balance of payments difficulties may enter into stand-by arrangements with the Fund under which the Fund commits itself to provide resources to be made available over periods of up to three years from the date of the arrangements. Purchases under these arrangements in the upper credit tranches depend upon the member’s meeting the performance criteria included in the arrangements.

In addition to purchases under the Fund’s credit tranche policies, members may use the Fund’s resources under decisions on:

  • Compensatory financing—to assist members, particularly primary exporters, encountering payments difficulties produced by temporary export shortfalls attributable to circumstances beyond their control and in addition, at their option, to assist members encountering payments difficulties produced by an excess in the cost of their cereal imports.
  • Buffer stock financing—to assist members in connection with the financing of international buffer stocks of primary products.
  • Extended Fund facility—to provide, through extended arrangements of up to three years, medium-term assistance to members to make structural adjustments in their economies. Purchases under these arrangements depend upon the member’s meeting the performance criteria included in the arrangements.
  • Supplementary financing facility and the policy on enlarged access—to make resources available under stand-by and extended arrangements, in addition to those available in the credit tranches or under the extended Fund facility, to members facing serious payments imbalances that are large in relation to their quotas. These policies are temporary and may be utilized only in conjunction with the use of resources in the upper credit tranches.

Members that purchase resources from the Fund undertake to repurchase the Fund’s holdings of their currencies by the payment to the Fund of SDRs or the currencies of other members specified by the Fund. Reserve tranche purchases made after April 1, 1978, are not subject to repurchase. Under the Fund’s repurchase policies, purchases in the credit tranches, purchases under the compensatory financing facility and under the buffer stock facility are to be repurchased in quarterly installments beginning three years and ending not later than five years after the date of purchase; repurchases of purchases financed with borrowed resources under the supplementary financing facility or the enlarged access policy are to be made in semiannual installments beginning three and one-half years and ending not later than seven years after the date of purchase; and repurchases under the extended Fund facility (other than purchases financed with borrowed resources under the supplementary financing facility or policy on enlarged access) are to be made in semiannual installments beginning four years and ending not later than ten years after the date of purchase. However, a member is entitled to repurchase at any time holdings of its currency on which the Fund levies charges, and is expected to make repurchases prior to the periods mentioned above as and when its balance of payments and reserve position improves.

Borrowed Resources Suspense Accounts

Borrowed Resources Suspense Accounts have been established in order to hold, transfer, convert, and invest (i) currencies borrowed by the Fund before they are transferred to the General Resources Account for use in transactions or operations; and (ii) currencies received by the Fund in repurchases financed with borrowed resources before repayments to lenders can be made. Members are not obligated to maintain the SDR value of their currencies held by the Fund in the Borrowed Resources Suspense Accounts, and as far as practicable, the currencies are invested in SDR-denominated obligations.

At April 30, 1986, borrowed resources held in suspense amounted to SDR 635.25 million (SDR 203.41 million at April 30,1985) and included accrued income of SDR 6.53 million (SDR 0.87 million at April 30, 1985).

Special Disbursement Account

The Fund administers a Trust Fund, established in 1976 to provide balance of payments assistance (loans) on concessional terms to certain members. The Special Disbursement Account was activated on June 30, 1981 to receive transfers from the Trust Fund (repayments of loans and interest), which is in the process of being wound up. Amounts received into the Special Disbursement Account from the Trust Fund were transferred on a same-day pass-through to the Supplementary Financing Facility Subsidy Account, which was established for the purpose of reducing the cost of eligible members that used the Fund’s resources under the supplementary financing facility. The Fund has determined that the resources of the Supplementary Financing Facility Subsidy Account are sufficient to meet its estimated needs, and transfers to that account from the Special Disbursement Account have been terminated. Amounts received from the Trust Fund are now being held in the Special Disbursement Account. Resources of the Supplementary Financing Facility Subsidy Account which may be in excess of its estimated needs are to be transferred back to the Special Disbursement Account.

Members are not obligated to maintain the SDR value of their currency held by the Fund in the Special Disbursement Account. Pending use of the resources held in the Special Disbursement Account, these resources are placed in SDR-denominated investments. Prior to an SDR-denominated investment, balances may be placed temporarily in U.S. dollardenominated investments. Thus, there may be valuation gains and losses in terms of the SDR on these resources from the time they are received until they can be invested in SDR-denominated investments.

The Special Disbursement Account is a part of the General Department of the Fund. However, the assets of the account are to be held separately from other accounts of the General Department and the income of the Account is to be placed to the Special Disbursement Account.

1. Accounting Practices

Unit of Account

The accounts of the General Department are expressed in terms of the SDR. At present, the currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five specified currencies. The Fund’s procedures require that the SDR valuation basket be revised each five years, and provide that the basket is to include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. In accordance with these requirements, the SDR valuation basket was revised effective January 1, 1986. The currencies comprising the basket and their amounts in the basket during the year ended April 30, 1986 were as follows:

Amounts
May 1–
December 31,January 1–
Currencies1985April 30, 1986
U.S. dollar0.540.452
Deutsche mark0.460.527
French franc0.741.02
Japanese yen3433.4
Pound sterling0.0710.0893

Members’ currencies are valued in terms of the SDR on the basis of the representative rate of exchange determined in accordance with the Rules of the Fund. Gold with depositories is valued on the basis that one SDR is equivalent to 0.888671 gram of fine gold.

Basis of Accounting

The Fund maintains its accounts on an accrual basis and, accordingly, recognizes income as it is earned and records expenses as they are incurred except that income from charges is deferred from members while they are overdue in their obligations to the Fund by six months or more (see Note 5). It is the practice of the Fund to make all calculations on the basis of the exact number of days in the accounting period.

The established policy of the Fund is to charge as an expense of each accounting period the total costs incurred for fixed property, furniture, and equipment. For the year ended April 30, 1986, the cost of property, furniture, and equipment charged as an expense amounted to SDR 6.6 million (SDR 17 million in 1985), of which SDR 6.2 million is included in other administrative expense (SDR 16.5 million in 1985).

2. Currencies and Securities

Each member has the option to substitute nonnegotiable and non-interest-bearing securities for the amount of its currency held by the Fund in the General Resources Account that is in excess of ¼ of 1 percent of the member’s quota. These securities, which are part of the Fund’s currency holdings, are encashable by the Fund on demand.

Changes in the Fund’s holdings of members’ currencies and securities for the year ended April 30, 1986 were as follows:

In millions of SDRs
April 30,

1985
April 30,

1986
Net

Change
Members’ quotas89,30289,3053
Members’ use of Fund
credit34,97334,640(333)
Members’ reserve tranche
positions(28,290)(26,087)2,203
Administrative currency
balances95(4)
Currencies and securities95,99497,8631,869

Each member is obligated to maintain the value of the balances of its currency held by the Fund in terms of the SDR except for holdings which may be held in Borrowed Resources Suspense Accounts, the Special Disbursement Account, and the Investment Account. Whenever the Fund revalues its holdings of a member’s currency, an account receivable or an account payable is established for the amount of currency payable by or to the member in order to maintain the value of the Fund’s holdings of the currency in terms of the SDR. The balances of the accounts receivable or payable are reflected in the Fund’s total currency holdings. At April 30, 1986 accounts receivable to maintain SDR values of currency holdings amounted to SDR 19,418.66 million and accounts payable amounted to SDR 2,965.82 million (SDR 16,990.80 million and SDR 981.99 million at April 30, 1985). At June 25, 1986, the amounts receivable were SDR 5,276.57 million and the amounts payable were SDR 70.63 million.

The Fund’s holdings of members’ currencies at April 30, 1986 are shown in Schedule 1.

3. SDR Holdings

SDRs are reserve assets created by the Fund and allocated to members participating in the SDR Department. Although SDRs are not allocated to the Fund, the Fund may acquire, hold, and dispose of SDRs through the General Resources Account. SDRs held by the Fund are received from its members in the settlement of their financial obligations to the Fund (quota payments, repurchases, and charges) and may be used by the Fund in transactions and operations between the Fund and its members (sold to members in purchases or transferred to members in the settlement of remuneration and interest on Fund borrowing). The Fund earns interest on its SDR holdings at the same rate as all other holders of SDRs.

4. Gold Holdings

At April 30, 1986 the Fund held 3,217,341 kilograms of gold at designated depositories.

5. Fund Operations

For the year ended April 30, 1986, members’ purchases amounted to SDR 4,101 million, of which SDR 160 million were reserve tranche purchases. Over the same period, repurchases by members totaled SDR 4,289 million, including repurchases of SDR 15 million relating to purchases made prior to the Second Amendment and attributed to the reserve tranche. The members’ purchases subject to repurchase are shown in Schedule 2.

Changes in the outstanding use of Fund credit under various facilities for the year ended April 30, 1986 were as follows:

In millions of SDRs
April 30, 1985PurchasesRepurchasesApril 30, 1986
Regular facilities5,5111,7659616,315
Compensatory
financing7,4906011,6616,430
Buffer stock
financing23716374
Extended Fund
facility6,5291141456,498
Supplementary
financing
facility6,3101,0345,276
Enlarged access8,8961,46131010,047
Total34,9733,9414,27434,640

Periodic Charges and Remuneration

The Fund levies charges, which are payable periodically, on its holdings of a member’s currency that derive from the member’s use of Fund credit. With effect from February 1, 1986, special charges are levied on holdings that are not repurchased when due and on charges that are not settled when due. These special charges are designed to recover the direct financial costs to the Fund arising from members’ overdue financial obligations. A service charge is levied by the Fund on each purchase involving use of Fund resources other than reserve tranche purchases.

The Fund also charges a stand-by fee payable at the beginning of each 12-month period on the undrawn balance of a standby or extended arrangement. This fee is refunded proportionately to purchases made under the arrangement. If the full amount of the arrangement is not drawn, the balance of the stand-by fee is taken into income by the Fund upon the expiration of the arrangement. Stand-by fees included in other income for the year ended April 30, 1986 amounted to SDR 6.9 million (SDR 4.3 million in 1985).

The Fund pays remuneration on a member’s remunerated reserve tranche position. A remunerated reserve tranche position is the amount by which the Fund’s holdings of a member’s currency (excluding holdings that derive from the use of Fund credit) is below the “norm.” The norm is an amount equal to 75 percent of the member’s quota on April 1, 1978 plus the total of subsequent increases in the member’s quota. For members that joined the Fund after April 1, 1978, the norm is determined by adding the proportion of the member’s quota equal to the average of the norm of all other members on the date the member joined the Fund and the total of subsequent increases in the member’s quota.

At April 30, 1986, the total holdings on which the Fund levied charges amounted to SDR 34,640 million (SDR 34,973 million in 1985), and total creditor positions on which the Fund paid remuneration amounted to SDR 20,121 million (SDR 22,211 million in 1985).

It is the policy of the Fund to exclude from current income charges owed by members that are overdue in meeting payments to the Fund by six months or more and also are not current in paying charges when due. Such charges are reported as deferred income. At April 30, 1986, eight members were more than six months late in discharging financial obligations to the Fund and also were not current in paying charges (four members at April 30, 1985). At that date, the total amount of charges from these eight members, reflected in the balance sheet as charges receivable and accrued and as deferred credits, amounted to SDR 127 million.

Changes in Deferred Income In millions of SDRs
Year Ended April 30
19851986
Balance—beginning of the year663
Additions to deferred income68173
Payments received(11)(109)
Balance—end of the year63^127

Included in the additions to deferred income in 1986 are SDR 37 million of charges applicable to a prior financial year (SDR 12 million in 1985). Included in payments received in 1986 are SDR 27 million of charges deferred in a prior year (none in 1985).

Overdue Obligations

Obligations to the General Department by the eight members overdue in payments for more than six months at April 30, 1986 (four members at April 30, 1985) were as follows:

In millions of SDRS
19851986
Use of Fund resources
Total7181,034
Repurchases overdue111309
Repurchases overdue six months or more58212
Charges
Total63127
Charges overdue44104
Charges overdue six months or more1359

6. Reserves

The Fund determines annually what part of its net income shall be placed to the General Reserve or to the Special Reserve, and what part, if any, shall be distributed. The Articles of Agreement permit the Fund to use the Special Reserve for any purpose for which it may use the General Reserve, except distribution. Any administrative deficit for any financial year must be written off first against the Special Reserve.

7. Borrowing

Outstanding borrowing by the Fund was as follows:

In millions of SDRs
April 30, 1985BorrowingRepaymentApril 30, 1986
Supplementary
financing
facility6,2391,2015,038
Enlarged access7,9641,9483949,518
14,2031,9481,59514,556

Scheduled repayments of outstanding borrowing by the Fund are shown in Schedule 3.

Supplementary Financing Facility

The supplementary financing facility became operational in May 1979. The Fund entered into borrowing agreements with 14 members, or institutions within their territories, and with the Swiss National Bank, under which the lenders agreed to make resources available to the Fund, at call, up to SDR 7.784 million through February 1984 to finance purchases by members under this facility. Borrowing by the Fund under these agreements is to be repaid in installments between three and one-half to seven years after the date of borrowing. Interest paid by the Fund on amounts borrowed under the borrowing agreements is based on the average yield on U.S. Government securities with a constant maturity of five years.

Enlarged Access

The policy on enlarged access became operational in May 1981. The Fund has entered into borrowing agreements with various members, or institutions within their territories, the Bank for International Settlements, and the Swiss National Bank, under which the lenders have agreed to make resources available to the Fund, up to SDR 15,305 million, to finance purchases by members under the policy. The maturities of borrowing by the Fund under these agreements vary from three months to seven years. Interest paid by the Fund on amounts borrowed under these agreements is at variable rates of interest which are established periodically, and are related to market interest rates, based on Eurocurrency deposit rates and weighted average yields of domestic instruments denominated in the five currencies in the SDR valuation basket.

General Arrangements to Borrow (GAB)

Under the General Arrangements to Borrow the Fund may borrow up to specified amounts from adherents when supplementary resources are needed to forestall or to cope with an impairment of the international monetary system. The GAB first became effective from October 24, 1962 and has been renewed until December 25, 1988.

In February 1983, the Fund approved an enlargement of the GAB to SDR 1 7 billion, including provision for the adherence of the Swiss National Bank as a participant, and for associated arrangements with nonparticipants. It also approved amendments that would allow the Fund to borrow under the GAB in certain circumstances in order to finance purchases by non-participants. These changes, including one associated agreement with the Saudi Arabian Monetary Agency (SDR 1.5 billion), became effective on December 26, 1983 when all ten participants had notified the Fund of their concurrence in the amendments and in the increased credit limits. The Swiss National Bank adhered to these arrangements in April 1984.

Borrowing Guidelines

The Fund has established guidelines for borrowing, which provide that the Fund will not allow the total of outstanding borrowing, plus unused credit lines, to exceed the range of 50 to 60 percent of the total of Fund quotas. Since all GAB lines of credit are unlikely to be called upon at the same time, the total of outstanding borrowing shall include either outstanding borrowing by the Fund under the GAB, or two thirds of the total credit lines under the GAB and associated agreements, whichever is the greater. The borrowing guidelines are subject to review by the Executive Board. Total outstanding borrowing and unused credit lines, calculated in accordance with these guidelines, at April 30, 1986 were equal to 34.8 percent of quotas (36.6 percent of quotas at April 30, 1985).

8. Commitments Under Stand-By and Extended Arrangements

At April 30, 1986, 26 arrangements were in effect and undrawn balances under these arrangements amounted to SDR 2,379.12 million. These arrangements are listed in Schedule 4.

9. Administrative Expenses

The Fund incurs administrative expenses primarily for salaries, travel, and other administrative needs, which are expended in accordance with an administrative budget approved by the Executive Board. Expenses for building are authorized outside of the annual administrative budget. The Fund is reimbursed for expenses incurred in administering the SDR Department.

The Fund has certain commercial deposits and receivables relating to its administrative activities. These deposits and receivables are not subject to the maintenance of value obligations.

The Fund pays various allowances to or on behalf of Executive Directors and staff, including the employer’s contribution to the Staff Retirement Plan. All contributions to the Plan and all other assets, liabilities, and income of the Plan are administered separately outside of the General Department and can be used or incurred only for the benefit of the participants in the Plan and their beneficiaries. The employer contributes that part of the costs and expenses of the Plan not provided by the contributions of the participants. In addition, experience gains and losses of the Plan, as determined by the actuary engaged by the Pension Committee, are amortized over a period of 15 years. The most recent valuation of the Plan by the actuary was made at April 30, 1985. At April 30, 1986, the unamortized experience losses based on that valuation amounted to SDR 24.2 million (calculated at the SDR value of the U.S. dollar on that date). Payments over the next 15 years to amortize the actuarial experience losses are estimated to be SDR 25.4 million (at the SDR value of the U.S. dollar on April 30, 1986), of which SDR 4.8 million was paid on May 1, 1986.

The Fund has also established a Supplemental Retirement Benefits Plan (SRBP) for the purpose of paying certain benefits not payable from the Staff Retirement Plan. Payments to the SRBP are made from the Administrative Budget. The assets of the SRBP are segregated from other assets of the Fund and are held on behalf of the beneficiaries entitled to these payments. The assets and resources of the SRBP are being reflected temporarily in the General Resources Account.

Contributions by the employer to the Staff Retirement Fund for the year ended April 30, 1986 amounted to SDR 30.7 million (SDR 27.6 million in 1985), including SDR 7.9 million for the amortization of actuarial experience losses (SDR 7.7 million in 1985) and SDR 4.7 million to fund cost of living supplements to beneficiaries (SDR 2.2 million in 1985).

The Fund staff is entitled to accumulated annual leave, up to a maximum of 60 days, which may be commuted into a cash payment upon termination of employment. In addition, upon the completion of five years’ service, each member of the staff is entitled to a termination grant, subject to maximum amounts based on years of service after July 1979. The Fund has elected to account for these amounts as an expense as they are earned.

INTERNATIONAL MONETARY FUND

General Department

Schedule 1 Quotas, Fund’s Holdings of Currencies, Members’ Use of Fund Resources, and Reserve Tranche Positions

as at April 30, 1986

(In thousands of SDRs)

Fund’s Holdings of Currencies1Use ofReserve
PercentFundTranche
QuotasTotalof QuotaResourcesPositions
Afghanistan86,70081,87194.44,831
Algeria623,100470,89475.6152,206
Antigua and Barbuda5,0004,999100.02
Argentina1,113,0003,364,553302.32,251,536
Australia1,619,2001,430,49488.3188,724
Austria775,600425,94454.9349,656
Bahamas, The66,40055,49683.610,908
Bahrain48,90023,89648.925,008
Bangladesh287,500658,008228.9392,90822,403
Barbados34,10070,452206.638,5142,162
Belgium2,080,4001,618,05077.8462,404
Belize9,50017,147180.59,5401,896
Benin31,30029,28193.62,024
Bhutan2,5001,93177.2570
Bolivia90,700129,903143.239,1824
Botswana22,1009,67643.812,430
Brazil1,461,3005,604,450383.54,143,056
Burkina Faso31,60024,06776.27,535
Burma137,000194,304141.857,300
Burundi42,70033,56078.69,156
Cameroon92,70092,50499.8197
Canada2,941,0002,467,79983.9473,222
Cape Verde4,5003,55078.9951
Central African Republic30,40053,312175.423,000111
Chad30,60037,341122.07,000264
Chile440,5001,446,560328.41,006,058
China2,390,9002,088,30487.3302,608
Colombia394,200394,203100.0
Comoros4,5004,501100.0
Congo37,30036,83298.7482
Costa Rica84,100249,756297.0165,634
Côte d’I voire165,500708,300428.0542,8002
Cyprus69,70065,03293.34,675
Denmark711,000500,61270.4210,396
Djibouti8,0006,76584.61,237
Dominica4,00012,683317.18,6889
Dominican Republic112,100389,758347.7277,656
Ecuador150,700499,129331.2348,400
Egypt463,400494,653106.731,250
El Salvador89,000149,019167.460,016
Equatorial Guinea18,40024,122131.15,713
Ethiopa70,600140,493199.069,880
Fiji36,50040,167110.011,5007,846
Finland574,900440,86376.7134,045
France4,482,8003,244,25572.41,238,766
Gabon73,10073,074100.028
Gambia, The17,10039,397230.422,31839
Germany, Federal Republic of5,403,7002,701,90850.02,701,800
Ghana204,500801,702392.0597,2002
Greece399,900324,92781.374,977
Grenada6,0007,714128.61,713
Guatemala108,000201,231186.393,225
Guinea57,90076,972132.919,063
Guinea-Bissau7,50010,069134.32,5692
Guyana49,200120,947245.871,745
Haiti44,100114,895260.570,83970
Honduras67,800176,941261.0109,140
Hungary530,7001,414,410266.5883,706
Iceland59,60074,396124.818,8134,025
India2,207,7005,470,616247.83,750,000487,092
Indonesia1,009,700979,24297.041,96272,425
Iran, Islamic Republic of660,000589,23889.370,770
Iraq504,000504,011100.0
Ireland343,400223,21265.0120,196
Israel446,600446,605100.0
Italy2,909,1001,895,97465.21,013,145
Jamaica145,500749,736515.3604,170
Japan4,223,3002,833,67067.11,389,642
Jordan73,900131,304177.757,400
Kampuchea, Democratic25,00037,494150.012,5007
Kenya142,000545,458384.1415,63912,192
Korea462,8001,838,883397.31,376,726676
Kuwait635,300318,77450.2316,549
Lao People’s Democratic Republic29,30030,050102.6750
Lebanon78,70059,86976.118,833
Lesotho15,10013,84991.71,253
Liberia71,300276,715388.1205,42920
Libyan Arab Jamahiriya515,700272,20152.8243,505
Luxembourg77,00064,78684.112,214
Madagascar66,400205,075308.8138,673
Malawi37,200153,191411.8118,1852,196
Malaysia550,600391,24571.1159,361
Maldives2,0001,99899.93
Mali50,800112,457221.470,3398,683
Malta45,10014,45632.130,675
Mauritania33,90060,055177.226,144
Mauritius53,600189,387353.3135,81530
Mexico1,165,5004,135,137354.82,969,602
Morocco306,6001,301,779424.6995,18818
Mozambique61,00061,000100.01
Nepal37,30041,853112.210,2505,699
Netherlands2,264,8001,496,15066.1768,664
New Zealand461,600461,529100.0113
Nicaragua68,20068,217100.07
Niger33,70088,532262.763,3928,560
Nigeria849,500849,496100.068
Norway699,000227,23032.5471,744
Oman63,10031,06849.232,085
Pakistan546,3001,608,673294.51,062,38519
Panama102,200376,166368.1273,96514
Papua New Guinea65,90070,614107.210,1005,391
Paraguay48,40018,15837.530,246
Peru330,900942,782284.9611,851
Philippines440,4001,328,668301.7919,54131,326
Portugal376,600918,826244.0571,90029,678
Qatar114,90079,32669.035,581
Romania523,4001,246,771238.2723,366
Rwanda43,80034,47778.79,324
St. Christopher and Nevis4,5004,49399.88
St. Lucia7,5007,500100.02
St. Vincent4,0004,000100.0
São Tomé and Principe4,0003,999100.02
Saudi Arabia3,202,4001,521,32947.51,681,079
Senegal85,100299,378351.8215,245975
Seychelles3,0002,99499.89
Sierra Leone57,900127,860220.869,97024
Singapore92,4009,39610.283,010
Solomon Islands5,0006,750135.02,260511
Somalia44,200158,348358.3114,142
South Africa915,7001,581,201172.7665,500
Spain1,286,000892,29069.4393,728
Sri Lanka223,100498,301223.4281,2046,004
Sudan169,700775,005456.7605,301
Suriname49,30049,301100.0
Swaziland24,70032,568131.97,87513
Sweden1,064,300815,36576.6248,945
Syrian Arab Republic139,100139,103100.0
Tanzania107,000125,120116.918,105
Thailand386,6001,205,268311.8847,45828,792
Togo38,40097,561254.159,360206
Tonga3,2502,51277.3738
Trinidad and Tobago170,10068,82240.5101,279
Tunisia138,200112,79081.625,422
Turkey429,1001,513,264352.71,116,43432,275
Uganda99,600333,084334.4236,9943,517
United Arab Emirates202,60073,70636.4128,896
United Kingdom6,194,0004,487,17272.41,706,886
United States17,918,3008,555,94347.79,365,054
Uruguay163,800468,970286.3305,163
Vanuatu9,0007,41482.41,586
Venezuela1,371,500889,67764.9481,831
Viet Nam176,800205,195116.128,3955
Western Samoa6,00013,901231.77,900
Yemen Arab Republic43,30053,043122.59,7509
Yemen, People’s Democratic Republic of77,20086,811112.49,609
Yugoslavia613,0002,512,537409.91,899,528
Zaïre291,000955,798328.5664,796
Zambia270,300969,115358.5698,82513
Zimbabwe191,000422,067221.0231,10034
Totals389,305,05097,863,02634,640,15326,086,552

Includes nonnegotiable, non-interest-bearing notes which members are entitled to issue in substitution for currency.

Less than SDR 500.

Details may not add to totals due to rounding.

Includes nonnegotiable, non-interest-bearing notes which members are entitled to issue in substitution for currency.

Less than SDR 500.

Details may not add to totals due to rounding.

INTERNATIONAL MONETARY FUND

General Department

Schedule 2 Members’ Purchases Subject to Repurchase by Year of Scheduled Repurchase1

as at April 30, 1986

(In thousands of SDRs)

Ordinary ResourcesBorrowed Resources
ExtendedCompen-BufferSupple-
Financial YearCreditFundsatorystockmentaryEnlarged
Ending April 30tranchesfacilityfinancingfinancingfinancingaccessTotal
19871,472,567441,7152,576,06839,7901,713,018787,7557,037,1572
19881,679,614637,4912,090,09630,6761,583,2591,756,0267,777,162
19891,328,227976,8281,014,0192,9701,149,2262,306,2446,777,514
19901,255,8711,064,807590,356653,4532,292,5215,857,008
1991579,1081,060,271159,900176,6131,821,0083,796,900
1992949,346829,3811,778,727
1993735,562254,063989,625
1994492,868492,868
1995132,219132,219
199614,69214,692
Totals6,315,3876,505,8006,430,43973,4365,275,56910,046,99834,653,8733,4

A member is entitled to repurchase at any time holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improves.

This total includes SDR 6.244 million reserve tranche purchases made prior to April 1, 1978 which are subject to repurchase.

The total of members’ purchases subject to repurchase exceeds the outstanding use of Fund credit by SDR 13.72 million because certain purchases made prior to the Second Amendment of the Articles of Agreement effective on April 1, 1978 which do not represent the extension of Fund credit must be repurchased in accordance with the repurchase terms then in effect.

Details may not add to totals due to rounding.

A member is entitled to repurchase at any time holdings of its currency subject to charges and is expected to make repurchases as and when its balance of payments and reserve position improves.

This total includes SDR 6.244 million reserve tranche purchases made prior to April 1, 1978 which are subject to repurchase.

The total of members’ purchases subject to repurchase exceeds the outstanding use of Fund credit by SDR 13.72 million because certain purchases made prior to the Second Amendment of the Articles of Agreement effective on April 1, 1978 which do not represent the extension of Fund credit must be repurchased in accordance with the repurchase terms then in effect.

Details may not add to totals due to rounding.

INTERNATIONAL MONETARY FUND

General Department

Schedule 3 General Repayments of Fund Borrowing as at April 30, 1986

(In thousands of SDRs)

Periods of Repayment1SupplementaryEnlarged
Financial YearsFinancingAccess
Ending April 30FacilityResourcesTotal
19871,657,7311,144,15322,801,884
19881,585,7953,275,81924,861,614
19891,152,1452,575,02823,727,173
1990519,0151,388,0001,907,015
1991123,788810,000933,788
1992275,000275,000
199350,00050,000
Totals5,038,4749,518,00014,556,474

Dates of repayment are the dates provided in the borrowing agreements between the Fund and lenders, including maximum periods of renewals which are at the Fund’s option. The borrowing agreements also permit earlier repayments in certain circumstances.

Includes short-term borrowing with original maturities not exceeding three years.

Dates of repayment are the dates provided in the borrowing agreements between the Fund and lenders, including maximum periods of renewals which are at the Fund’s option. The borrowing agreements also permit earlier repayments in certain circumstances.

Includes short-term borrowing with original maturities not exceeding three years.

INTERNATIONAL MONETARY FUND

General Department

Schedule 4 Status of Stand-By Arrangements and Extended Arrangements as at April 30, 1986

(In thousands of SDRs)

MemberDate of ArrangementExpirationTotal Amount AgreedUndrawn Balance
STAND-BY ARRANGEMENTS
ArgentinaDecember 28, 1984May 31, 19861,182,500236,500
BangladeshDecember 2, 1985June 30, 1987180,000120,000
BelizeDecember 3, 1984May 31, 19867,1251,185
Central African RepublicSeptember 23, 1985March 22, 198715,00014,000
Côte d’I voireJune 3, 1985June 2, 198666,20013,240
Equatorial GuineaJune 28, 1985June 27, 19869,2003,800
GuineaFebruary 3, 1986March 2, 198733,00024,000
JamaicaJuly 17, 1985May 31, 1987115,00073,400
KoreaJuly 12, 1985March 10, 1987280,000160,000
MaliNovember 8, 1985March 31, 198722,86016,360
MauritaniaApril 26, 1986April 25, 198712,00012,000
MauritiusMarch 1, 1985August 31, 198649,00014,000
MoroccoSeptember 12, 1985February 28, 1987200,000190,000
NepalDecember 23, 1985January 22, 198718,6508,400
NigerDecember 5, 1985December 4, 198613,4808,088
PanamaJuly 15, 1985March 31, 198790,00055,000
PhilippinesDecember 14, 1984June 13, 1986615,000212,000
SenegalJanuary 16, 1985July 15, 198676,60010,500
SomaliaFebruary 22, 1985September 30, 198622,10020,100
ThailandJune 14, 1985March 31, 1987400,000250,000
TogoMay 17, 1985May 16, 198615,360
UruguaySeptember 27, 1985March 26, 1987122,85087,750
YugoslaviaMay 16, 1985May 15, 1986300,00067,500
ZambiaFebruary 21, 1986February 28, 1988229,800194,800
4,075,7251,792,623
EXTENDED ARRANGEMENTS
ChileAugust 15, 1985August 14, 1988750,000562,500
MalawiSeptember 19, 1983September 18, 198681,00024,000
831,000586,500
Totals4,906,7252,379,123

INTERNATIONAL MONETARY FUND

SDR Department

Statement of Allocations and Holdings as at April 30, 1986

(In thousands of SDRs)

19861985
ALLOCATIONS
Net cumulative allocations of
SDRs to participants21,433,33021,433,330
Charges due but not paid (Note)12,2075,348
21,445,53721,438,678
HOLDINGS
Participants
With holdings above allocations
Allocations9,691,4539,881,074
Net receipt of SDRs4,655,5363,490,643
14,346,98913,371,717
With holdings below allocations
Allocations11,741,87711,552,256
Net use of SDRs7,376,9658,118,755
4,364,9123,433,501
Total holdings by participants18,711,90116,805,218
General Resources Account2,721,6424,615,747
Prescribed holders11,99417,713
21,445,53721,438,678
The accompanying note is an integral part of the financial statements.
The accompanying note is an integral part of the financial statements.
/S/ W.O. Habermeier/S/ J. de Larosiere
TreasurerManaging Director

INTERNATIONAL MONETARY FUND

SDR Department

Statement of Receipt and Use of SDRs for the year ended April 30, 1986

(In thousands of SDRs)

Total
ParticipantsGeneral Resources AccountPrescribedHolders19861985
Total holdings at beginning of the financial year16,805,2184,615,74717,71321,438,67821,434,368
Receipt of SDRs
Transfers among participants and prescribed holders:
Transactions with designation1,808,7831,808,7832,152,419
Transactions by agreement2,520,304156,9452,677,2492,706,030
Operations:
Loans52,43052,43066,757
Settlement of financial obligations2,68556,06858,75394,216
Net interest on SDRs309,4203,673313,093325,799
Transfers from participants to General Resources Account:
Repurchases1,183,0671,183,067717,223
Charges2,915,2342,915,2342,927,354
Quota payments73873814,213
Interest on SDRs312,221312,221605,883
Assessment on SDR allocation3,6753,6753,588
Adjustments2727
Transfers from General Resources Account to participants and prescribed holders:
Purchases1,965,3401,965,3402,594,549
Repayments of Fund borrowing532,845532,845129,207
Interest on Fund borrowing720,915720,915445,839
Refunds and adjustments9,5699,56913,838
In exchange for currencies of other members:
Acquisitions to pay charges1,549,5931,549,593953,358
Remuneration1,530,805____________1,530,8051,952,454
Total receipts11,002,6894,414,962216,68615,634,33715,702,727
Use of SDRs
Transfers among participants and prescribed holders:
Transactions with designation1,808,7831,808,7832,152,419
Transactions by agreement2,509,359167,8912,677,2502,706,030
Operations:
Loans52,43052,43066,757
Settlement of financial obligations56,6692,08458,75394,216
Transfers from participants to General Resources Account:
Repurchases1,183,0671,183,067717,223
Charges2,915,2342,915,2342,927,354
Quota payments73873814,213
Assessment on SDR allocation3,6753,6753,588
Adjustments2727
Transfers from General Resources Account to partici-
pants and prescribed holders:
Purchases1,965,3401,965,3402,594,549
Repayments of Fund borrowings532,845532,845129,207
Interest on Fund borrowings720,915720,915445,839
Refunds and adjustments9,5699,56913,837
In exchange for currencies of other members:
Acquisitions to pay charges1,549,5931,549,593953,358
Remuneration1,530,8051,530,8051,952,454
Charges in the SDR Department:
Net charges due625,313625,313931,683
Charges not paid when due-37,446-37,446-38,505
Settlement of unpaid charges30,587____________30,58734,195
Total uses9,096,0066,309,067222,40515,627,47815,698,417
Total holdings at end of financial year18,711,9012,721,64211,99421,445,53721,438,678
The accompanying note is an integral part of the financial statements.
The accompanying note is an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

SDR Department

Note to the Financial Statements

SDR Department

All transactions and operations involving SDRs are conducted through the SDR Department. SDRs do not constitute claims by holders against the Fund to provide currency, except in connection with the termination of participation or liquidation. SDRs are allocated by the Fund to members that are participants in the SDR Department in proportion to their quotas in the Fund. Three allocations were made in 1970, 1971, and 1972, totaling SDR 9.3 billion. Three further allocations were made, in 1979, 1980, and 1981, totaling SDR 12.1 billion. The Fund is empowered to prescribe certain official entities as holders of SDRs: to date, 14 institutions have been prescribed as holders. These prescribed holders do not receive allocations and cannot use or receive SDRs in designation.

Uses of SDRs

Participants and prescribed holders can use and receive SDRs in transactions and operations by agreement among themselves. Participants can also use SDRs in operations involving the General Resources Account, such as the payment of charges and repurchases. In addition, the Fund ensures, by designating participants to provide freely usable currency in exchange for SDRs, that a participant can use its SDRs to obtain such currency if it has need because of its balance of payments or its reserve position or development in its reserves. A participant is not obliged to provide currency for SDRs beyond the point at which its holdings of SDRs in excess of its net cumulative allocation are equal to twice its net cumulative allocation. A participant may, however, provide currency in excess of the obligatory limit or any agreed higher limit.

Interest, Charges, and Assessment

Interest is paid to each holder on its holdings of SDRs and charges are levied at the same rate on each participant’s net cumulative allocation plus any negative balance of the participants or unpaid charges. The SDR interest rate is determined by reference to a combined market interest rate, which is a weighted average of yields or rates on short-term instruments in the capital markets of France, the Federal Republic of Germany, Japan, the United Kingdom, and the United States. Effective August 1, 1983, the SDR interest rate is determined on a weekly basis and interest on SDR holdings is paid and charges on net cumulative allocations are collected on a quarterly basis. Interest and charges are settled by crediting and debiting individual holdings accounts on the first day of the subsequent quarter. The Fund is required to pay interest to each holder, whether or not sufficient SDRs are received in payment of charges. At April 30, 1986 the amount of unpaid charges amounted to SDR 12.2 million from four members, of which SDR 7.7 million from two members was overdue for six months or more.

The combined market interest rate used to determine the SDR interest rate is calculated each Friday, using the yields or rates of that day. The SDR interest rate, which is set equal to the combined market interest rate, enters into effect on the following Monday and applies until the end of the following Sunday.

The expenses of conducting the business of the SDR Department are paid by the Fund from the General Resources Account, which is reimbursed in SDRs at the end of each financial year. For this purpose, the Fund levies an assessment, at the same rate for all participants, on their net cumulative allocation.

INTERNATIONAL MONETARY FUND

Supplementary Financing Facility Subsidy Account

Balance Sheet as at April 30, 1986

(In thousands of SDRs) (Note 1)

ASSETS19861985
Currencies50
Interest-earning deposits (Note 2)183,241241,992
Accrued income6,12110,015
Total189,362252,057
RESOURCES
Resources—Account balance189,362252,057
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
IslW.O. HabermeierIslJ. de larosiere
TreasurerManaging Director

INTERNATIONAL MONETARY FUND

Supplementary Financing Facility Subsidy Account

Statement of Changes in Resources for the year ended April 30, 1986

(In thousands of SDRs) (Note 1)

19861985
Balance at beginning of the year252,05796,034
Contributions (Note 1)4,8225,559
Investment income17,49113,801
Exchange valuation gain72305
Transfers from (to) Special Disbursement Account (net)(3,544)226,273
Balance before subsidy payments270,898341,972
Subsidy payments (Note 3)81,53689,915
Balance at end of the year189,362252,057
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

Supplementary Financing Facility Subsidy Account

Notes to the Financial Statements

Purpose

The Supplementary Financing Facility Subsidy Account, which is administered by the Fund, was established in December 1980 to assist low-income developing members to meet the cost of using resources made available through the Fund’s supplementary financing facility and under the policy on exceptional use. The assets of the Supplementary Financing Facility Subsidy Account are separate from the assets of all other accounts of or administered by the Fund and are not used to discharge liabilities or to meet losses incurred in the administration of other accounts. The Supplementary Financing Facility Subsidy Account became operational in May 1981 and the first subsidy payments were made in December of that year. The resources of the Account arise from contributions and loans from members, interest income earned on investments, and transfers of amounts received in interest and loan repayments from the Trust Fund through the Special Disbursement Account. The Fund has determined that the resources of the Supplementary Financing Facility Subsidy Account are sufficient to meet its estimated needs, and transfers from the Trust Fund have been terminated. Resources considered to be in excess of the estimated needs are transferred back to the Special Disbursement Account. As of April 30, 1986, SDR 15.03 million has been transferred back to the Special Disbursement Account from the Subsidy Account.

1. Accounting Practices

Unit of Account

The accounts of the Supplementary Financing Facility Subsidy Account are expressed in terms of the SDR. At present, the currency value of the SDR is determined by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five specified currencies. The Fund’s procedures require that the SDR valuation basket be revised each five years, and provide that the basket is to include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. In accordance with these requirements, the SDR valuation basket was revised effective January 1, 1986. The currencies comprising the basket and their amounts in the basket during the year ended April 30, 1986 were as follows:

Amounts
May 1–
December 31,January 1–
Currencies1985April 30, 1986
U.S. dollar0.540.452
Deutsche mark0.460.527
French franc0.741.02
Japanese yen3433.4
Pound sterling0.0710.0893

Basis of Accounting

The accounts are maintained on an accrual basis and, accordingly, income is recognized as it is earned and expenses are recorded as they are incurred. It is the practice of the Fund to make all calculations on the basis of the exact number of days in the accounting period.

Contributions

Contributions to the Supplementary Financing Facility Subsidy Account are made in currencies which are valued in terms of SDRs on the basis of exchange rates against the SDR at the time of receipt. Cumulative contributions to the Supplementary Financing Facility Subsidy Account at April 30, 1986 amounted to SDR 57.39 million.

2. Interest-Earning Deposits

To avoid exchange risks, the assets of the Account, pending their disbursement, are held in the form of interest-earning SDR-denominated time deposits.

3. Subsidy Payments

The amount of the subsidy is calculated as a percentage per annum of the average daily balances in each year of the Fund’s holdings of recipient members’ currencies subject to the schedule of charges applicable to the supplementary financing facility and the policy on exceptional use. The rate of subsidy to be paid is determined by the Fund in the light of the resources available and the subsidy may not exceed the equivalent of 3 percent per annum of the currency holdings to which the supplementary financing facility and charges on exceptional use apply, nor reduce the effective charge on such holdings below the rate of charge which would have been applicable had they been acquired under the Fund’s policies on the regular use of its resources. Subsidy payments are not disbursed to members that have not paid the charges to which the subsidy applies. At April 30, 1986, subsidy payments totaling SDR 5.8 million had not been made to four members.

INTERNATIONAL MONETARY FUND

Trust Fund

Balance Sheet

as at April 30, 1986

(In thousands of SDRs) (Note 1)

ASSETS19861985
Loans (Note 2)2,236,8722,649,580
Interest and charges receivable and accrued (Note 4)5,8144,889
Investments, at cost (which approximates market value)3,4454,063
Accrued interest on investments92126
Total2,246,2232,658,658
TRUST RESOURCES AND LIABILITIES
Trust resources2,238,5702,651,792
Liabilities—
Undistributed profits from sale of gold (Note 3)3,3944,026
Deferred income (Note 4)2,336639
Borrowing (Note 5)1,9202,197
Accrued interest on borrowing34
Total2,246,2232,658,658
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
IslW.O. HabermeierIsl J. de larosiere
TreasurerManaging Director

INTERNATIONAL MONETARY FUND

Trust Fund

Statement of Income and Expense for the year ended April 30, 1986

(In thousands of SDRs) (Note 1)

19861985
Income:
Interest and special charges on loans (Note 2)12,83613,805
Deduct income deferred (Note 4)1,697639
11,13913,166
Investment income275411
Exchange valuation gain (loss)(43)8
11,37113,585
Less—Interest expense on borrowing (Note 5)1011
Net income11,36113,574
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

Trust Fund

Statement of Changes in Trust Resources

for the year ended April 30, 1986

(In thousands of SDRs) (Note 1)

19861985
Balance at beginning of the year2,651,7922,864,491
Net income11,36113,574
Balance before transfers to the Special
Disbursement Account2,663,1532,878,065
Transfers to the Special Disbursement Account (Note 6)424,583226,273
Balance at end of the year2,238,5702,651,792
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

INTERNATIONAL MONETARY FUND

Trust Fund

Notes to the Financial Statements

Purpose

The Trust Fund, which is administered by the Fund as Trustee, was established in 1976 to provide balance of payments assistance on concessional terms to eligible members that qualify for assistance. The resources of the Trust Fund are separate from the assets of all other accounts of or administered by the Fund and are not used to discharge liabilities or to meet losses incurred in the administration of other accounts.

1. Accounting Practices

Unit of Account

The accounts of the Trust Fund are expressed in terms of the SDR. At present, the currency value of the SDR is determined daily by the Fund each day by summing the values in U.S. dollars, based on market exchange rates, of a basket of five specified currencies. The Fund’s procedures require that the SDR valuation basket be revised each five years, and provide that the basket is to include the currencies of the members having the largest exports of goods and services during the five-year period ending one year prior to the date of the revisions. In accordance with these requirements, the SDR valuation basket was revised effective January 1, 1986. The currencies comprising the basket and their amounts in the basket during the year ended April 30, 1986 were as follows:

Amounts
May 1–January 1–
CurrenciesDecember 31, 1985April 30, 1986
U.S. dollar0.540.452
Deutsche mark0.460.527
French franc0.741.02
Japanese yen3433.4
Pound sterling0.0710.0893

Basis of Accounting

The accounts are maintained on an accrual basis and, accordingly, income is recognized as it is earned and expenses are recorded as they are incurred except that income from interest from members that are overdue in their obligations to the Fund by six months or more is deferred and is recognized as income only when paid unless the member has remained current in settling charges when due (see Note 4). The expenses of conducting the business of the Trust Fund that are paid from the General Department of the Fund are reimbursable by the Trust Fund on the basis of an estimate of these expenses. Following the termination of the Trust Fund on April 30, 1981, residual administrative costs have been absorbed by the General Department. It is the practice of the Fund to make all calculations on the basis of the exact number of days in the accounting year.

2. Loans

Loans were made from the Trust Fund to those eligible members that qualified for assistance in accordance with the provisions of the Trust Fund Instrument. The final loan disbursements were made on March 31, 1981. Each loan disbursement is repayable in ten semiannual installments which shall begin not later than the end of the first six months of the sixth year, and be completed at the end of the tenth year after the date of disbursement, except that most of the final loan disbursements made to members on March 31, 1981 that amounted to about 0.4 percent of quotas are to be repaid in a single installment not later than ten years after the date of that disbursement. Interest on the outstanding loan balances is charged at the rate of ½ of 1 percent per annum, and special charges are levied on late payments of interest and principal.

3. Direct Distribution of Profits

The Fund decided that the Trustee make, through the Trust Fund, the direct distribution of part of the profits from the sale of gold for the benefit of developing members. The share of each developing member in this direct distribution of profits was calculated on the basis of its share in total Fund quotas as at August 31, 1975 and on the basis of the actual profits realized in the gold auctions.

The direct distribution of profits has been completed, except that an amount of US$3,990,776, representing the share of Democratic Kampuchea, will continue to be held in the Trust Fund until relations with that member have been restored.

4. Deferred Income

At April 30, 1986, seven members (two at April 30, 1985) with obligations to the Trust Fund were late by six months or more in discharging their obligations to the Fund and were also not current in settling charges as they fell due. For these seven members the recognition of income from interest on the outstanding loans is being deferred. At April 30, 1986, the total amount of deferred income, reflected in the balance sheet as interest and charges receivable and accrued and as deferred income, amounts to SDR 2.4 million (SDR 0.64 million at April 30, 1985). Total outstanding loans to these members were as follows (in millions of SDRs):

April 30
19851986
Total128.0223.8
Amounts overdue15.956.4
Amounts overdue six months or more8.136.8

5. Borrowing

One beneficiary of the direct distribution of profits from the Trust Fund has lent a part of its entitlements to the Trust Fund. The amounts borrowed by the Trust Fund are repayable in five equal annual installments beginning not later than the end of the sixth year after the date of borrowing. Interest on the amounts outstanding is paid at the same rate as interest is charged on Trust Fund loans, provided that the rate shall not be less than ½ of 1 percent per annum.

6. Termination and Transfer of Resources

The Fund, as Trustee, decided that upon the completion of the final loan disbursements, the Trust Fund shall be terminated as of April 30, 1981. After that date, the activities of the Trust Fund have been confined to the completion of any unfinished business of the Trust Fund and the winding up of its affairs.

The resources of the Trust Fund held on the termination date or subsequently received by the Trustee have been employed to pay interest and principal when due on loan obligations and to make transfers to the Special Disbursement Account.

Report of the External Audit Committee

Staff Retirement Plan

Washington, D.C.

June 27, 1986

Authority and Scope of the Audit

In accordance with Section 20(b) of the By-Laws of the International Monetary Fund, we have audited the financial statements of the Staff Retirement Plan for the year ended April 30, 1986, which consist of statements of

  • —Accumulated Plan benefits and net assets available for benefits,
  • —Changes in accumulated Plan benefits, and
  • —Changes in net assets available for benefits.

The audit was conducted in accordance with international auditing guidelines and, accordingly, included reviews of accounting and control systems, tests of accounting records, evaluation of the extent and results of work performed by the Internal Auditor, and other audit procedures.

Audit Opinion

In our opinion, the financial statements have been prepared in accordance with generally accepted accounting principles, applied on a basis consistent with that of the preceding year, and give a true and fair view of the financial status of the Staff Retirement Plan as at April 30, 1986 and of the changes in financial status for the year then ended.

External Audit Committee:

/s/ Jay M. Weinstein, Chairman (United States)

/s/ Mohamad A. Zawawi (Jordan)

/s/ Gilton Bazilio Chiwaula (Malawi)

INTERNATIONAL MONETARY FUND

Staff Retirement Plan

Statement of Accumulated Plan Benefits and Net Assets Available for Benefits

as at April 30, 1986

(In thousands of U.S. dollars)

(Note 1)

19861985
Accumulated Plan benefits (Note 1):
Actuarial present value of accumulated Plan benefits
Vested benefits
Retired participants153,500139,400
Other participants129,700117,500
Nonvested benefits51,50046,900
Total actuarial present value of
accumulated Plan benefits334,700303,800
Net assets available for benefits:
Investments, at current value (Notes 1 and 3)
Portfolio denominated in U.S. dollars597,666425,338
Portfolio denominated in other currencies180,03781,051
777,703506,389
Receivables:
Contributions1,125937
Accrued interest and dividends (Note 1)4,7675,123
Other2,295711
8,1876,771
Cash at banks4517
Total assets785,935513,177
Liabilities:
Accounts payable4991,108
Net assets available for benefits785,436512,069
Excess of net assets available for benefits over actuarial present value of accumulated Plan benefits450,736208,269
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.
/s/W.O. Habermeier/s/j. de larosiere
TreasurerManaging Director

INTERNATIONAL MONETARY FUND

Staff Retirement Plan

Statement of Changes in Accumulated Plan Benefits

for the year ended April 30, 1986

(In thousands of U.S. dollars)

(Note 1)

19861985
Actuarial present value of accumulated
Plan benefits at beginning of the year303,800268,400
Increase (decrease) during the year attributable to:
Benefits accumulated17,69023,483
Increase for interest due to decrease
in discount period29,60026,100
Benefits paid(16,390)(14,183)
Net increase30,90035,400
Actuarial present value of accumulated
Plan benefits at end of the year (Note 1)334,700303,800
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

international monetary fund

Staff Retirement Plan

Statement of Changes in Net Assets Available for Benefits

for the year ended April 30, 1986

(In thousands of U.S. dollars) (Note 1)

19861985
Investment income (Note 1):
Net gain in current value
of investments (Note 3)212,14636,529
Interest20,73020,700
Dividends15,60411,917
248,48069,146
Contributions (Note 2):
International Monetary Fund32,29828,294
Participants9,8629,057
Participants restored to service4646
Net transfers from/(to) retirement plans
of other international organizations(929)168
41,27737,565
Total additions289,757106,711
Benefits:
Pensions13,01411,484
Withdrawal benefits1,5721,060
Commutation benefits1,7361,606
Death benefits6833
Total payments16,39014,183
Net additions273,36792,528
Net assets available for benefits at:
Beginning of year512,069419,541
End of year—April 30, 1986785,436512,069
The accompanying notes are an integral part of the financial statements.
The accompanying notes are an integral part of the financial statements.

international monetary fund

Staff Retirement Plan

Notes to the Financial Statements

Description of Plan

General

The Staff Retirement Plan (Plan) is a defined benefit pension plan covering nearly all staff members of the International Monetary Fund (Employer). All assets and income of the Plan are the property of the Employer and are held and administered by it separately from all its other property and assets and are to be used solely for the benefit of participants and retired participants or their beneficiaries. The account is valued in U.S. dollars.

Benefits

Participants are entitled to an annual pension beginning at normal retirement age (65). The amount of the pension is based on number of years of service and highest average gross remuneration. Participants who have reached the age of 55 may retire with a reduced pension (or with an unreduced pension if the sum of their age and years of service equals 90 or more). The Plan also provides for disability retirement and death benefits. Upon termination before age 55 a participant with at least three years of eligible service may elect to receive either a withdrawal benefit (accumulated contributions of the participant plus an amount equal to a percentage of such accumulated contributions, the percentage being based on number of months of eligible service) or a deferred pension to commence after the participant has reached the age of 55. A participant entitled to receive a normal, early retirement, or deferred pension may elect to commute up to one third of his or her pension, and receive a lump sum amount in lieu of the amount of pension commuted. A participant entitled to receive a disability pension may elect to commute one third of the early retirement pension that would otherwise have been applicable.

Contributions

As a condition of employment, regular staff members are required to participate in the Plan and to contribute 7 percent of their gross remuneration to the Plan. Certain other categories of staff members may elect to participate in the Plan. The Employer meets the administrative costs of the Plan, such as actuarial, management, and custodial fees, and is to contribute any additional amounts not provided by the contributions of participants to pay costs and expenses of the Plan not otherwise covered. In financial year 1986, these administrative costs were approximately $3.8 million ($2.9 million in 1985).

1. Accounting Practices

Valuation of Investments

Investments in securities listed in stock exchanges are valued at the last reported sales price on the last business day of the accounting period. Over-the-counter securities are valued at their bid price on the last business day of the year. Purchases and sales made by U.S. investment managers are recorded on the settlement date basis, and transactions made by the international investment managers are recorded on the trade date basis.

Accumulated Benefits—Vested and Nonvested

The actuarial value of vested benefits is shown for two categories. For retired participants, the amount shown equals the present value of the benefits expected to be paid over the future lifetime of the pensioner and, if applicable, the surviving spouse of the pensioner. For other participants, the amount shown equals the present value of the deferred pension earned to the valuation date for a participant, or, if greater, the value of the withdrawal benefit for that participant, summed over all participants. For the purpose of determining the actuarial value of the vested benefits at the end of the Plan year, it is assumed that the Plan will continue to exist but that participants will not earn pension benefits beyond the date of the calculation.

The amount of nonvested benefits represents the total of the withdrawal benefits for all participants with less than three years of eligible service.

Investment Income

Dividend and interest income from investments are recorded as earned.

2. Funding Policy

The Employer makes normal contributions to the Plan equal to 14 percent of gross remuneration. Whenever the cost of living for a financial year increases, pensions shall be augmented by a pension supplement, which shall be the lesser of the increase in the cost of living for the financial year or 2 percent. If the increase in the cost of living for a year exceeds 2 percent, pensions shall be augmented by an additional supplement to be paid from contributions from the Employer equal to the difference between 2 percent and the increase in the cost of living. The Employer has the right for good cause to reduce the additional supplement to not less than 1 percent.

Plan Termination

In the event of the termination of the Plan by the Employer, the assets of the Plan shall be used to satisfy all liabilities to participants, retired participants, and their beneficiaries and all other liabilities of the Plan. Any remaining balance of the assets shall be returned to the Employer.

3. Investments

A summary of investments showing book and market values is as follows (in thousands of U.S. dollars):

19861985
Book

Value
Market

Value
Book

Value
Market

Value
Portfolio denominated in U.S.
U.S. Government securities94,182102,996127,601131,092
Corporate bondsand debentures38,61943,60223,10624,495
Common and preferred stocks286,221363,402204,640240,648
Short-term investments87,15987,66629,09129,103
506,181597,666384,438425,338
Portfolio denominated in other currencies110,422180,03774,85781,051
616,603777,703459,295506,389

The net gain in the current value of investments represents the gain (loss) realized during the year from the sale of investments, the unrealized appreciation of the market value of investments, and, for investments denominated in currencies other than U.S. dollars, valuation differences arising from exchange rate changes of other currencies against the U.S. dollar. These net gains, in thousands of U.S. dollars, are as follows:

19861985
Portfolio denominated in U.S
dollars120,23239,996
Portfolio denominated in
other currencies
Net market gain51,7362,102
Net exchange valuation
gain (loss)40,178(5,569)
Net gain212,14636,529

The net exchange gain was calculated by converting the book value of securities in currencies other than U.S. dollars to U.S. dollars at the exchange rates in effect at both the beginning and the end of the accounting period (or at the time a security was purchased or sold if this occurs during the accounting period) and subtracting one from the other to determine the exchange gain or loss.

At April 30, 1986, 11.4 percent of the net assets available for benefits were held in the Grantham, Mayo, Van Otterloo Managed Market Trust, and 5.1 percent of the net assets available for benefits were held in the GMO Foreign Equity Core Pooled Trust, which have underlying investments in approximately 300 equity issues. There were no other investments which represented 5 percent or more of the net assets available for benefits.

4. Actuarial Valuation

The most recent valuation of the Plan by the actuary engaged by the Pension Committee was made as at April 30, 1985. Actuarial assumptions used in the valuation were (a) life expectancy of participants as based on the 1960 United Nations Service Tables, (b) certain percentages of staff, differing by sex, would retire at each age between 55 and 65, (c) an assumed average rate of return on investments of 6 percent per annum, and (d) a scale of salary progression consistent with the assumed rate of return. The purpose of the annual valuation is to determine, on the basis of the actuarial assumptions used, the level of additional Employer contributions necessary to fund experience losses and cost of living increases beyond the first 2 percent. It is further assumed that the Plan will continue to exist and that participants will continue to earn pension benefits beyond the date of the valuation until the date of withdrawal, disability, death, or retirement. This valuation therefore differs from that in which the actuarial value of vested benefits is determined (Note 1).

Experience gains and losses of the Plan, as determined by the actuary, are amortized over a period of 15 years. The most recent valuation (at April 30, 1985) showed an experience gain of $21.2 million for the year then ended. At April 30, 1986, the unamortized experience losses based on that valuation amounted to $28.4 million, of which $5.6 million was paid by the Employer on May 1, 1986.

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