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Annual report 2011
48
Notes to the financial statements
for the year ended 31 December 2011
1. General
The EUROPEAN INVESTMENT FUND (hereaf ter the
“Fund” or “EIF”) was incorporated on 14 June 1994, in
Luxembourg, as an international financial institution. The
address of its registered office is 96, boulevard Konrad
Adenauer, L-2968 Luxembourg.
The primary task of the Fund, while providing adequate
return on equity, is to contribute to the pursuit of European
Community objectives through:
■
the provision of guarantees to financial institutions
that cover credits to small and medium sized entities
(”SME”);
■
the acquisition, holding, management and disposal of
equity participations;
■
the administration of special resources entrusted by
third parties, and
■
associated activities.
The Fund operates as a partnership whose members are
the European Investment Bank (hereafter the “EIB”), the
European Union, represented by the Commission of the
European Communities (the “Commission”), and a group
of financial institutions of Member States of the European
Union and of two candidate countries. The members of
the Fund shall be liable for the obligations of the Fund
only up to the amount of their share of the capital sub-
scribed and not paid in.
The financial year of the Fund runs from 1 January to
31 December each year.
The EIB has a majority shareholding in the Fund. Con-
sequently the Fund is included in the consolidated fi -
nancial statements of the EIB Group. The consolidated
financial statements are available at the registered of-
fice of the EIB at 98-100, boulevard Konrad Adenauer,
L-2950 Luxembourg.
2. Significant accounting policies and
basis of preparation
2.1 Basis of preparation
2.1.1 Statement of compliance
The Fund’s financial statements have been prepared in ac-
cordance with International Financial Reporting Standards
(IFRS), as issued by the International Accounting Stand-
ards Board (IASB), as endorsed by the European Union.
The Fund’s financial statements have been authorised for
issue by the Board of Directors on 14 March 2012.
2.1.2 Basis of measurement
The financial statements have been prepared on an his-
torical cost basis except for the following material items
in the statement of financial position:
■
available-for-sale financial assets which are measured
at fair value
■
financial instruments at fair value through profit or loss
which are measured at fair value
■
the defined benefit obligation is recognised as the
present value of the defined benefit obligation less
the net total of the plan assets, plus unrecognised ac-
tuarial gains, less unrecognised past service cost and
unrecognised actuarial losses.
2.1.3 Use of estimates and judgments
The preparation of financial statements in accordance
with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judg-
ment when applying the Fund’s policies. Use of available
information and application of judgment are inherent in
the formation of estimates. Actual results in the future could
dif fer from such estimates and the dif ferences may be
material to the financial statements.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are rec-