The financial statements have been prepared for the year ended 31 December 2015. The comparative period is from 22 December 2014 to 31 December 2014. All amounts in the financial statements have been rounded to the nearest €m unless otherwise indicated. Where used, ‘€'000’ or ‘k’ denotes thousand, ‘m’ denotes million and ‘bn’ denotes billion.

The financial statements have been prepared pursuant to Section 12 of the National Treasury Management Agency Act 1990 (as amended) in a format approved by the Minister for Finance.

On the commencement of Part 6 of the NTMA Act 2014, the assets and liabilities of the National Pensions Reserve Fund (“NPRF”) became the assets and liabilities of the Fund (subject to the provisions of Schedule 4 of the NTMA Act 2014 in the case of certain foreign assets and foreign liabilities). The legal transfer of foreign assets must be done in conjunction with the relevant counterparty. The process is largely complete, and a small number of foreign assets had not legally transferred from the NPRF to the Ireland Strategic Investment Fund as at 31 December 2015. These assets (held by the NPRF Commission acting through the Agency) were previously derecognised by the NPRF Commission following the transition date, and are recognised and presented within the Fund’s financial statements for the year ending 31 December 2015, in line with Financial Reporting Standards (“FRS”).

Notwithstanding the Fund’s significant holdings in the equity of Allied Irish Banks p.l.c. (“AIB”) as part of its Directed investments the Agency (as manager and controller of the Fund) does not have the ability to exercise control, dominant influence or significant influence, over AIB as the Minister has reserved the voting control in the shares to his direction alone. Therefore, the Agency does not consolidate the results and the financial position of AIB into the financial statements of the Fund.

The Fund is early adopting the March 2016 amendments made to paragraphs 34.22 and 34.42 of FRS 102 revising the disclosure requirements to the fair value hierarchy which is disclosed in note 15 of the financial statements.

Statement of compliance

The financial statements have been prepared in accordance with the Financial Reporting Standard 102 (“FRS 102”); the Financial Reporting Standard applicable in the UK and Republic of Ireland as issued in September 2015.

Transition to Financial Reporting Standards 102 (“FRS 102”)

The transition to FRS 102 had no material effect on the amounts reported for the current or prior financial year. In the transition, the Fund has made no material measurement adjustments.

The date of transition to FRS 102 is 22 December 2014 (i.e. the earliest period for which the Fund presents full comparative information) and accordingly the comparative amounts presented for the period ended 31 December 2014 are based on the Fund’s financial statements for that period.

No changes to the Fund’s accounting policies have been made arising from the transition to FRS 102. In effect, the accounting policies applied in preparing these financial statements under FRS 102 are consistent with the accounting policies applied in preparing the prior year financial statements under the previous accounting framework.

As a result of the transition to FRS 102 the Fund has made a number of presentational changes in the Statement of Financial Position (“SOFP”) and the Statement of Comprehensive Income (“SOCI”) from the prior year. The following changes were made to the SOFP; non current assets are presented in investments, unrealised losses on futures and foreign exchange contracts are now presented within financial liabilities and loans and receivables and cash and cash equivalents have been shown separately. The following presentational changes were made to the SOCI; the investment income has been split between dividend income, interest income and property, private equity and other income.

On initial application of FRS 102, in accounting for its financial instruments a reporting entity is required to apply either;

• the full requirements of Section 11 and 12 of FRS 102, relating to Basic Financial Instruments and Other Financial Instruments or;
• the recognition and measurement provisions of IAS 39 Financial Instruments: Recognition and Measurement and only the disclosure requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments or;
• the recognition and measurement provisions of IFRS 9 Financial Instruments and only the disclosure requirements of FRS 102 relating to Basic Financial Instruments and Other Financial Instruments.

The Fund has chosen to implement the recognition and measurement provisions of Sections 11 and 12 of FRS 102.