Chapter

Appendix 4

Author(s):
International Monetary Fund. Finance Dept.
Published Date:
October 2015
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Disclosure of Financial Position with the IMF in the Balance Sheet of a Member’s Central Bank

This appendix elaborates on the final section of Chapter 2 in the text, “Disclosure of Financial Position with the IMF by the Member Countries.”1 The accounting treatment of IMF transactions should reflect the member’s legal and institutional arrangements and the substance of the transactions, as well as be compliant with the relevant financial reporting standards. The following four examples illustrate the gross and net methods for reporting IMF-related assets and liabilities in the balance sheet of a central bank.

In the examples below, all figures represent local currency units.

  • I. The basic underlying assumptions for Examples 1 and 2 are the following:
    • (a) On the balance sheet date, the member has a quota equal to 2 million in local currency and an SDR allocation of 1 million.
    • (b) The reserve tranche portion of the subscription (25 percent of the quota) has been paid in SDRs. Hence, the central bank’s SDR holdings, originally equal to 1 million in local currency, are lower by 500,000 on the balance sheet date.
    • (c) The member has elected to pay 99 percent of the local currency subscription (75 percent of its quota) in the form of nonnegotiable, non-interest-bearing securities. Of the remaining 1 percent (15,000), 9/10 has been paid into the IMF No. 1 Account and 1/10 is maintained in the No. 2 Account.
  • II. Additional assumptions for Examples 3 and 4 are the following:
    • (a) The member has drawn its reserve tranche position of 500,000 in local currency.
    • (b) The member has received IMF resources (used IMF credit) equal to 4,500,000 million, for which securities have been issued.2
Reporting IMF-Related Assets and Liabilities: Example 1—Gross Method
Balance Sheet
AssetsLiabilities
Foreign assets:Foreign liabilities:
IMF quota2,000,000IMF No. 1 Account13,500
IMF No. 2 Account1,500
IMF Securities Account1,485,000
Total IMF currency holdings1,500,000
SDR holdings500,000SDR allocation1,000,000
Total assets2,500,000Total liabilities2,500,000
Reporting IMF-Related Assets and Liabilities: Example 2—Net Method
Balance Sheet
AssetsLiabilities
Foreign assets:Foreign liabilities:
IMF No. 2 Account1,500
IMF reserve tranche position501,500
SDR holdings500,000SDR allocation1,000,000
Total assets1,001,500Total liabilities1,001,500
Reporting IMF-Related Assets and Liabilities: Example 3—Gross Method
Balance Sheet
AssetsLiabilities
Foreign assets:Foreign liabilities:
IMF quota2,000,000IMF No. 1 Account13,500
IMF No. 2 Account1,500
IMF Securities Account6,485,000
Total IMF currency holdings16,500,000
SDR holdings500,000SDR allocation1,000,000
Foreign reserves5,000,000
Total assets7,500,000Total liabilities7,500,000

Includes 4,500,000 in local currency stemming from the use of IMF credit and 500,000 from the drawing of the reserve tranche.

Includes 4,500,000 in local currency stemming from the use of IMF credit and 500,000 from the drawing of the reserve tranche.

Reporting IMF-Related Assets and Liabilities: Example 4—Net Method
Balance Sheet
AssetsLiabilities
Foreign assets:Foreign liabilities:
Foreign reserves15,000,000Use of IMF credit4,500,000
SDR holdings500,000SDR allocation1,000,000
Total assets5,500,000Total liabilities5,500,000

Foreign reserves are net of the balance in the No. 2 Account. This balance includes 4,500,000 from the use of IMF credit and 500,000 from the drawing of the reserve tranche. Since the reserve tranche was part of foreign reserves, the drawing changes the composition of foreign reserves but not the total balance.

Foreign reserves are net of the balance in the No. 2 Account. This balance includes 4,500,000 from the use of IMF credit and 500,000 from the drawing of the reserve tranche. Since the reserve tranche was part of foreign reserves, the drawing changes the composition of foreign reserves but not the total balance.

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