## THE FUND’S INCOME POSITION FOR FY 2017—ACTUAL OUTCOME

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**Canonical URL:** [THE FUND’S INCOME POSITION FOR FY 2017—ACTUAL OUTCOME](https://www.imf.org/-/media/files/publications/pp/2017/pp081517the-fund-s-income-position-for-fy-2017-actual-outcome.pdf)

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### Executive summary
- Total FY 2017 net income, including income from surcharges, amounted to SDR 1.9 billion, about SDR 258 million higher than estimated in April.
- The FY 2017 GRA net income was about SDR 1.49 billion and was placed to the Fund’s reserves.
- In accordance with April 2017 decisions, a net transfer of currencies amounting to SDR 1.41 billion was made in August 2017 from the GRA to the Investment Account (IA).
- Precautionary balances reached SDR 16.7 billion at the end of FY 2017.

### Key findings — drivers of the FY 2017 outcome
- IAS 19 timing adjustment:
  - The FY 2017 IAS 19 timing adjustment amounted to SDR 720 million compared to the April estimate of SDR 447 million.
  - Components:
    - Pension cost accrual (IAS 19 expense) for FY 2017: SDR 381 million.
    - Pension funding (actual funding): SDR 134 million.
    - Accrual vs. funding timing difference (loss): SDR 247 million.
    - Actuarial gains for FY 2017: SDR 967 million (April projection: SDR 605 million).
  - The larger-than-expected IAS 19 gain largely reflects (a) higher returns earned from plan assets in the final quarter of FY 2017 and (b) actual liability experience differing from prior actuarial assumptions; and recognition of past service costs related to two plan amendments (expanded medical benefits coverage and updated commutation factors).
- Investment Account income:
  - Fixed-Income Subaccount investment income: SDR 80 million (April projection: SDR 75 million).
  - Endowment Subaccount (gold profits) investment income: SDR 447 million (April projection: SDR 461 million).
  - The endowment is reported as 98 percent invested following completion of the three-year phasing-in and partial funding activity; remaining gold sales profits temporarily held in USD short-term fixed deposits.
- Lending income and surcharges:
  - Lending income (including surcharges): SDR 1.43 billion, in line with the April estimate.
  - Service charges (about 2 percent of lending income) were lower due to delays in six projected purchases; margin, commitment fees, and surcharge income broadly in line with projections.
- Expenses and budget outturn:
  - Total expenses: SDR 827 million, about SDR 3 million lower than projected in April.
  - Net administrative expenditures: SDR 779 million (versus April projection SDR 768 million).
  - Capital budget items expensed: SDR 22 million (about SDR 10 million lower than projected), reflecting a delay in the start-up of a major campus improvement initiative and lower HQ1 renewal expenses.
  - Depreciation: SDR 28 million (marginally lower than projection).
  - Additional items: an additional contribution of US$2 million to the Retired Staff Benefits Investment Account noted.
  - Table 3 reconciles net administrative budget outturn and administrative expenses reported in the FY 2017 audited financial statements (administrative expenses in audited statements include the IAS 19 timing adjustment).

### Exact income and expenditure figures (Table 1 highlights; in millions of SDRs)
- Operational income: 1,017 (April projection: 1,014; difference -3)
  - Lending income: 855 (April projection: 849; difference -6)
    - Margin for the rate of charge: 487 (486; -1)
    - Service charges: 35 (30; -5)
    - Commitment fees: 33 (33; 0)
  - Fixed-Income Subaccount: 75 (80; 5)
  - Interest free resources: 11 (9; -2)
  - Reimbursements: 76 (76; 0)
- Expenses: 830 (April projection: 827; difference -3)
  - Net administrative expenditures: 768 (777; 9)
  - Capital budget items expensed: 32 (22; -10)
  - Depreciation: 30 (28; -2)
- Net operational income (A-B): 187 (187; 0)
- Surcharges: 584 (583; -1)
- IAS 19 timing adjustment: 447 (720; 273) — note: April projection listed first, actual outcome second in Table 1 formatting
- Endowment Subaccount investment income (gold profits): 461 (447; -14)
- Net income position (Total comprehensive income): 1,679 (1,937; 258)
- Memorandum items:
  - Outstanding Fund credit (average balances, SDR billions): 48.7 (48.6)
  - SDR interest rate (average, in percent): 0.2 (0.2)
  - US$/SDR exchange rate (average): 1.38 (1.38)
  - Precautionary balances (end of period, SDR billions): 16.4 (16.7)

(Note: Table 1 columns show April projections and Actual Outcome; differences reflect (actual minus April).)

### Reconciliations and tables
- IAS 19 reconciliation (Table 2, in millions of SDRs):
  - Accrual vs. Funding: April projection -158; Actual outcome -247
  - Pension cost accrual: April projection -292; Actual outcome -381
  - Pension funding: 134 (both April and Actual)
  - Actuarial gains: April projection 605; Actual outcome 967
  - Total IAS 19 timing difference: April projection 447; Actual outcome 720
- Administrative expenses reconciliation (Table 3, in millions of U.S. dollars unless otherwise stated):
  - Total administrative expenses per the audited financial statements: USD 1,066
  - Total administrative expenses per the audited financial statements (SDR millions, using effective weighted average FY 2017 U.S. dollar/SDR exchange rate of 1.38): 355
  - Net administrative budget outturn: 39
  - Capital budget items expensed: 30
  - Depreciation: -105
  - IAS 19 (accrual vs. funding) timing adjustment: 1,385 (reflects the difference between IAS 19 expense USD 540 million and actual funding USD 185 million)
  - Reimbursements from PRG Trust, CCR Trust, and SDR Department included in reconciliation

### Decisions and actions
- No decisions are required at this time; the Executive Board took necessary decisions in April 2017 during the review of the Fund’s income position for FY 2017 and FY 2018.
- Treatment of FY 2017 income:
  - Endowment Subaccount income of SDR 447 million retained in the IA.
  - Fixed-Income Subaccount income of SDR 80 million transferred to the GRA for meeting administrative expenses.
  - FY 2017 GRA net income (SDR 1,490 million) placed in equal parts to the Fund’s general reserve and special reserve.
  - Net currency transfer of SDR 1.41 billion from the GRA to the IA executed in August 2017.

*The Fund’s Income Position for FY 2017—Actual Outcome. August 15, 2017. International Monetary Fund.*

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_Source: https://www.imf.org/-/media/files/publications/pp/2017/pp081517the-fund-s-income-position-for-fy-2017-actual-outcome.pdf_