Notes to the annual financial statements at 31 December 2016 ACCOUNTING METHODS AND RULES USED The FRR s financial statements are prepared using generally applicable principles based on the single chart of accounts for social security organisations and opinion no. 200307 of 24 June 2003 of the CNC, as amended by opinion no. 200810 of 5 June 2008.
General accounting conventions have been applied in compliance with the principles of prudence, con- sistency, sincerity and fairness of view in accord- ance with the following underlying assumptions: going concern, consistency of accounting methods and independence of financial years.
As the FRR s accounts are stated in euro, the for- eign currency positions of the FRR s mandates are valued using their equivalent value calcu- lated using WM/Reuters closing spot rates.
Transactions are recorded on the trading date. Since 30 November 2006, transactions involving transferable securities have been booked with charges included, in accordance with the CNC s opinion of 31 March 2006.
The weighted average cost price rule (WACP) is applied for realised capital gains or losses on securities, and the FIFO (first in first out) rule is applied to futures.
Asset values are calculated on the basis of posi- tions held on Friday evening or the last TARGET business day of the week, and on the last TARGET business day of the month. The default price is the closing price on the issuer s benchmark market, on a case by case basis on the principal market of listing.
If no price is available on the valuation day, the asset is valued using the last known price, or in accordance with a predetermined procedure if using an old price.
Bonds are valued on the principle of a Bid quota- tion based on prices obtained from various finan- cial services providers.
Interest accrued at the time of purchase or sale, as well as end of period interest, is expressed by reference to the value date. This accounting method is linked to the recognition of transac- tions from the trading date.
BTF and BTAN securities are valued using the interest rate published by the Banque de France on the valuation day.
Transferable debt securities and similar securi- ties that are not traded in large volumes are val- ued using an actuarial method based on a zero coupon rate of the same maturity increased, where applicable, by an issuer spread.
UCITS are valued using the last known net asset value. ETFs are valued using the last price quoted.
Private equity funds are valued using the last val- uations provided by the fund managers.
Securitisation entities are valued on the basis of the most recent valuations indicated by the managers if they are below their purchase cost, or at par if higher.
Forward financial instruments traded on regu- lated or similar markets and associated liabilities are valued using the settlement price.
Forward currency positions are valued both by linear discounting of the initial contango/back- wardation amount and by valuing the currency position using WM/Reuters closing spot rates.
Swaps are valued using the prices provided by the counterparty, under the control of the fund manager, and are also subject to the various con- trol levels put in place by the FRR.
Unrealised gains and losses and unrealised exchange differences are recognised in the bal- ance sheet as valuation differences, and do not affect the Fund s result.
Withholding tax recovered is recognised as and when received.
Realised capital gains and losses and definitive exchange differences are recognised in the expenses and income accounts.