Illustrative IFRS Financial Statements Investment Funds 2019

Illustrative
IFRS
financial
statements
2019
Investment funds
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Illustrative IFRS financial statements 2019 –
Investment funds
Illustrative IFRS financial statements 2019 – Investment funds
This publication provides an illustrative set of financial statements, prepared in accordance with International
Financial Reporting Standards (IFRS), for a fictional open-ended investment fund (‘ABC Fund’ or the ‘Fund’).
ABC Fund is an existing preparer of IFRS financial statements; IFRS 1, ‘First-time adoption of IFRS’, is not applicable.
It does not have any subsidiaries, associates or joint ventures. The Fund’s shares are not traded in a public market.
Guidance on financial statements for first-time adopters of IFRS is available at www.pwc.com/ifrs.
This publication is based on the requirements of IFRS standards and interpretations for the financial year beginning
on 1 January 2019.
There are no standards effective for the first time in 2019 that required changes to the disclosures or accounting
policies in this publication. However, readers should consider whether any of the standards that are mandatory for
the first time for financial years beginning 1 January 2019 could affect their own accounting policies. Appendix XII
contains a full list of these standards (including those that have only a disclosure impact) as well as a summary of
their key requirements.
In compiling the illustrative disclosures, we have updated the guidance included in Appendix VIII to address IFRIC 23
‘Uncertainty over income tax treatments’ which is applicable for financial years beginning on or after 1 January 2019.
Commentary boxes are included throughout the publication to provide additional information where necessary.
We have attempted to create a realistic set of financial statements for an open-ended investment fund. However, by
necessity we illustrate disclosures that for many entities may be immaterial. Determining the level of disclosure is
a matter of judgment, and naturally, disclosure of immaterial items is not required. Certain types of transactions have
been excluded as they are not relevant to the Fund’s operations. Example disclosures for some of these additional
items have been included in appendices.
The illustrative disclosures should not be considered the only acceptable form of presentation. The form and content
of each reporting entity’s financial statements are the responsibility of the entity’s management. Alternative
presentations to those proposed in this publication may be equally acceptable if they comply with the specific
disclosure requirements prescribed in IFRS.
These illustrative financial statements are not a substitute for reading the standards and interpretations themselves or
for professional judgement as to the fairness of presentation. They do not cover all possible disclosures that IFRS
requires, nor do they take account of any specific legal framework. Further specific information may be required
in order to ensure fair presentation under IFRS. We recommend that readers refer to our most recent IFRS disclosure
checklist publication. Additional accounting disclosures may be required in order to comply with local laws and/or
stock exchange regulations.
Format
The references in the left-hand margin of the financial statements represent the paragraph of the standard in which
the disclosure appears – for example, ‘8p40’ indicates IAS 8 paragraph 40. The reference to IFRS appears in full – for
example, ‘IFRS13p66’ indicates IFRS 13 paragraph 66. The designation ‘DV’ (disclosure voluntary) indicates that
IFRS does not require the disclosure. Additional notes and explanations are shown in footnotes and commentary
boxes.
PwC – Illustrative IFRS financial statements 2019 – Investment funds i

ii PwC – Illustrative IFRS financial statements 2019 – Investment funds
ABC Fund financial statements
31 December 2019
PwC – Illustrative IFRS financial statements 2019 – Investment funds iii

iv PwC – Illustrative IFRS financial statements 2019 – Investment funds
Contents
Note Page
Statement of financial position .................................................................................................................................... 1
Statement of comprehensive income – by nature of expense ............................................................................... 2
Statement of changes in net assets attributable to holders of redeemable shares ........................................... 3
Statement of cash flows ............................................................................................................................................... 4
Notes to the financial statements ............................................................................................................................... 5
1. General information ................................................................................................................................................. 5
2. Summary of significant accounting policies ........................................................................................................... 5
2.1 Basis of preparation .................................................................................................................................. 5
2.2 Foreign currency translation ...................................................................................................................... 6
2.3 Financial assets and financial liabilities at fair value through profit or loss ............................................... 6
2.4 Offsetting financial instruments ................................................................................................................. 9
2.5 Due from and due to brokers .................................................................................................................... 9
2.6 Cash and cash equivalents ....................................................................................................................... 9
2.7 Accrued expenses ..................................................................................................................................... 9
2.8 Redeemable shares .................................................................................................................................. 9
2.9 Interest income and interest from financial assets at fair value through profit or loss ............................ 10
2.10 Dividend income ...................................................................................................................................... 10
2.11 Transaction costs .................................................................................................................................... 10
2.12 Distributions payable to holders of redeemable shares .......................................................................... 10
2.13 Increase/decrease in net assets attributable to holders of redeemable shares from operations ............ 10
2.14 Taxation .................................................................................................................................................. 10
2.15 Collateral ................................................................................................................................................. 11
3. Financial risks ........................................................................................................................................................ 11
3.1 Financial risk factors ............................................................................................................................... 11
3.1.1 Market risk .................................................................................................................................... 11
3.1.2 Liquidity risk .................................................................................................................................. 15
3.1.3 Credit risk ...................................................................................................................................... 17
3.1.4 Offsetting and amounts subject to master netting arrangements and similar agreements ........... 19
3.2 Capital risk management ........................................................................................................................ 20
3.3 Fair value estimation ............................................................................................................................... 20
4. Critical accounting estimates and judgements .................................................................................................... 26
4.1 Critical accounting estimates and assumptions ...................................................................................... 26
4.2 Critical judgements .................................................................................................................................. 26
5. Interest income and interest from financial assets at fair value through profit or loss ..................................... 27
6. Financial assets at fair value through profit or loss ............................................................................................. 27
7. Financial liabilities at fair value through profit or loss ......................................................................................... 28
8. Financial instruments by category ........................................................................................................................ 29
9. Derivative financial instruments ............................................................................................................................. 29
10. Margin accounts .................................................................................................................................................... 30
11. Cash and cash equivalents ................................................................................................................................... 30
12. Redeemable shares ............................................................................................................................................... 30
13. Distribution payable ............................................................................................................................................... 30
14. Related-party transactions ..................................................................................................................................... 31
Independent auditor’s report ..................................................................................................................................... 32
Appendices
Appendix I – Statement of cash flows – direct method ........................................................................................... 33
Appendix II – Funds whose shares are equity ........................................................................................................ 34
Appendix III – Funds with puttable instruments reclassified from liabilities to equity .............................................. 37
Appendix IV – Funds that invest in other investment funds .................................................................................... 41
Appendix V – Funds with significant leverage ......................................................................................................... 46
Appendix VI – Segment reporting – multiple segments .......................................................................................... 48
Appendix VII – Segment reporting – single segment .............................................................................................. 51
Appendix VIII – Investment funds with a tax uncertainty ......................................................................................... 52
Appendix IX – Impact of IFRS 12, ‘Disclosure of interests in other entities’ on funds that invest in other
investment funds .................................................................................................................................................. 55
Appendix X – Offsetting: Requirements and Disclosures under IAS 32 and IFRS 7 .............................................. 57
Appendix XI – Funds whose shares are transacted using a different measurement basis for certain assets or
liabilities, when compared to IFRS ....................................................................................................................... 64
Appendix XII – New standards and amendments ................................................................................................... 68
PwC – Illustrative IFRS financial statements 2019 – Investment funds v

vi PwC – Illustrative IFRS financial statements 2019 – Investment funds
Statement of financial position
(All amounts in e thousands unless otherwise stated)
1p54, 60, 113 As at 31 December

Note 2019 2018
Assets
1p66 Current assets
1p54(d),
IFRS7p8(a) Financial assets at fair value through profit or loss 6, 9 106,460 93,242
IFRS9p3.2.23 Financial assets at fair value through profit or loss pledged as collateral 6, 9 15,268 –
IFRS7p8 Due from brokers 2,356 984
1p54(h),
IFRS7p8 Other receivables 497 448
1p55 Margin accounts 10 1,026 223
1p54(i) Cash and cash equivalents 11 1,620 325
Total assets 127,227 95,222
Liabilities
1p69 Current liabilities
1p54(m),
IFRS7p8(e) Financial liabilities at fair value through profit or loss 7, 9 (11,663) (9,738)
IFRS7p8 Due to brokers (893) (665)
1p54(k) Accrued expenses (257) (145)
1p55 Liabilities (excluding net assets attributable to holders of redeemable shares) (12,813) (10,548)
32IE32 Net assets attributable to holders of redeemable shares 114,414 84,674
The notes on pages 5 to 31 are an integral part of these financial statements.
PwC – Illustrative IFRS financial statements 2019 – Investment funds 1

Statement of comprehensive income – by nature of expense
Statement of comprehensive income1 – by nature of expense
1p82, 81B, 85, Year ended 31 December

102, 113 Note 2019 2018
Income
1p82(a) Interest income 5 167 74
1p85 Interest from financial assets at fair value through profit or loss 5 780 475
IFRS9p5.7.1A Dividend income 1,538 1,055
1p85 Net foreign currency gains or losses on cash and cash equivalents2 27 (7)
IFRS7p20(a)(i), Other net changes in fair value on financial assets and financial liabilities at fair value
1p35 through profit or loss 6, 7 13,455 (2,218)
1p85 Total net income/(loss) 15,967 (621)
1p85,99 Expenses
Management fee 14 (803) (684)
Custodian, secretarial and administration fees 14 (56) (47)
Transaction costs (326) (137)
Directors’ fees 14 (30) (25)
Other operating expenses (151) (123)
Total operating expenses (1,366) (1,016)
1p85 Operating profit/(loss) 14,601 (1,637)
1p82(b) Finance costs (excluding increase/decrease in net assets attributable to holders of
redeemable shares)
1p85, 32 Distributions to holders of redeemable shares 13 (2,000) (1,000)
p35
Profit/(loss) after distributions and before tax 12,601 (2,637)

1p82(d) Withholding taxes (182) (138)
32IE32, 1p85, Increase/(decrease) in net assets attributable to holders of redeemable shares from
32p35 operations3 12,419 (2,775)
1
IAS 1 ‘Presentation of financial statements’, allows a choice of presenting all items of income and expense recognised in a period either (a) in a single
statement of comprehensive income, or (b) in two statements comprising (i) a separate income statement, which displays components of profit or loss, and
(ii) a statement of comprehensive income, which begins with profit or loss and displays components of other comprehensive income. ABC Fund has elected
to use the single statement approach.
2
Foreign currency gains and losses are only disclosed for cash and cash equivalents because there are no other financial assets and liabilities that are not
accounted for at fair value through profit or loss, upon which foreign currency gains or losses have arisen during the period.
3
1p82A requires the disclosure of each component of ‘other comprehensive income’. Other comprehensive income comprises items of income and expense
(including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other IFRS. ABC Fund has no other
comprehensive income items. All income and expenses have previously been reported in the income statement.
2 PwC – Illustrative IFRS financial statements 2019 – Investment funds

Statement of changes in net assets attributable to holders of redeemable shares
Statement of changes in net assets attributable to holders of redeemable shares1
Year ended 31 December

1p6, 106, 113 Note 2019 2018
Net assets attributable to holders of redeemable shares at 1 January 84,674 76,713
Proceeds from redeemable shares issued 26,991 12,901
Redemption of redeemable shares (9,670) (2,165)
Net increase from share transactions 17,321 10,736
Increase/(decrease) in net assets attributable to holders of redeemable shares from
operations 12,419 (2,775)
Net assets attributable to holders of redeemable shares at 31 December 12 114,414 84,674
1
This statement of changes in net assets attributable to holders of redeemable shares provides relevant and useful information to the reader corresponding
to the requirements of IAS 1 and is therefore considered best practice. There are no equity balances or movements of equity in either period.

Statement of cash flows
Statement of cash flows1

7p10, 18(b) Year ended 31 December
Note 2019 2018
Cash flows from operating activities
Increase/(decrease) in amount attributable to holders of redeemable shares 12,419 (2,775)
7p20 Adjustment for:
– Interest income and interest from financial assets at fair value through profit or loss (947) (549)
– Distributions to holders of redeemable shares 2,000 1,000
– Dividend income (1,538) (1,055)
7p35 – Withholding taxes 182 138
7p28 – Exchange (gains)/losses on cash and cash equivalents (27) 7
12,089 (3,234)
Net (increase)/decrease in due from/to brokers (1,144) 124

Net increase in other receivables and accrued expenses 37 35
Increase in margin accounts (803) (804)
Increase in financial assets at fair value through profit or loss (28,486) (9,009)
Increase in financial liabilities at fair value through profit or loss 1,925 2,156
Cash used in operations (16,382) (10,732)
7p31 Interest received 917 482

7p31 Dividend received 1,412 664
Net cash used in operating activities (14,053) (9,586)
7p21, 10 Cash flows from financing activities
7p17 Distributions paid to holders of redeemable shares 13 (2,000) (1,000)
7p17 Proceeds from redeemable shares issued 26,991 12,901
7p17 Redemption of redeemable shares (9,670) (2,165)
Net cash from financing activities 15,321 9,736
Net increase in cash and cash equivalents 1,268 150
Cash and cash equivalents at beginning of the year 11 325 182
7p28 Exchange gains/(losses) on cash and cash equivalents 27 (7)
Cash and cash equivalents at end of the year 11 1,620 325
1
The cash flow statement above has been presented using the indirect method as this is more commonly seen in practice. An illustration of the cash flow
statement using the direct method has been presented in appendix I.

Notes to the financial statements
1. General information
1p138(a) ABC Fund (the ‘Fund’) is an open-ended investment fund domiciled and incorporated as a limited liability company
1p51(a)(b) under the laws of Lagartos. The address of its registered office is 3 Cypress Pointe, West Bay Road, Lagartos.
1p138(b) The Fund’s objective is to generate significant medium to long-term capital growth. It aims to achieve this objective by
trading a highly diversified portfolio of listed equity and debt securities of predominantly US and other global
companies included in the S&P 500 index as well as eurozone sovereign and corporate debt. The Fund will also invest
in related derivatives within a defined strategy and may invest a limited portion of its portfolio in unlisted securities.
Unlisted holdings will at no time exceed 10% of the Fund’s total net asset value attributable to holders of redeemable
shares.
1p138(b) The Fund’s investment activities are managed by XYZ Capital Limited (the ‘Investment Manager’), with the
administration delegated to ABC Fund Services Limited.
The Fund offers its shares to a broad group of investors mainly from the eurozone.1
10p17 These financial statements were authorised for issue by the Board of Directors on 15 February 2020.
2. Summary of significant accounting policies

1p119 The principal accounting policies applied in the preparation of these financial statements are set out below. These
1p117(b) policies have been consistently applied to all the years presented, unless otherwise stated.
1p112(a) 2.1 Basis of preparation
1p16 The financial statements of ABC Fund have been prepared in accordance with International Financial Reporting
1p117(a) Standards (IFRS). The financial statements have been prepared under the historical cost convention, as modified by
the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value
through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Fund’s
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, are disclosed in Note 4.
8p28 (a) Standards and amendments to existing standards effective 1 January 20192
There are no standards, amendments to standards or interpretations that are effective for annual periods beginning on
1 January 2019 that have a material effect on the financial statements of the Fund.
8p30 (b) New standards, amendments and interpretations effective after 1 January 2019 and have not been early adopted3
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
after 1 January 2019, and have not been early adopted in preparing these financial statements. None of these are
expected to have a material effect on the financial statements of the Fund.
1
If instruments are traded in a public market or when the financial statements are filed with a securities commission or other regulatory organisation for the
purpose of issuing any class of instrument in a public market, IFRS 8, ‘Operating segments’, would be applicable. Appendix VI and VII include segment
reporting for a fund that is within the scope of IFRS 8.
2
New or revised accounting standards and interpretations only need to be disclosed if they resulted in a change in accounting policy which had an impact in
the current year or could impact on future periods. There is no need to disclose pronouncements that did not have any impact on the entity’s accounting
policies and amounts recognised in the financial statements. ABC Fund has disclosed amendments that could have affected its accounting policies but
doesn’t mention standards that are not relevant to it. A complete list of standards and interpretations that apply for the first time to financial reporting periods
commencing on or after 1 January 2019 is set out in Appendix XII.
3
Entities must explain if there are any accounting standards and interpretations which are not yet applied but are expected to have a material effect on the
entity in the current period and on foreseeable future transactions. Where a pronouncement introduces a new accounting option that was not previously
available, the entity should explain whether and/or how it expects to use the option in the future. In our view, where the expected impact is material, entities
should make these disclosures even if the new accounting pronouncement is issued after the balance sheet date but before the date of authorisation of the
financial statements. The illustrative accounting policy note only discusses pronouncements that are relevant for ABC Fund and that have not been early
adopted. It also makes certain assumptions regarding materiality that may not apply to all entities alike and will need to be adapted to the individual
circumstances of an entity. For a complete listing of standards and interpretations that were in issue as at 30 September 2019 but not yet mandatory please
refer to Appendix XII.

1p119 2.2 Foreign currency translation

IFRS7p21
(a) Functional and presentation currency
21p17 The Fund’s investors are mainly from the eurozone, with the subscriptions and redemptions of the redeemable shares
21p9 denominated in euro. The primary activity of the Fund is to invest in US securities and derivatives and to offer eurozone
1p51(d)
investors a higher return compared to other products available in the eurozone. The performance of the Fund is
measured and reported to the investors in euro. The Board of Directors considers the euro as the currency that most
faithfully represents the economic effects of the underlying transactions, events and conditions. The financial
statements are presented in euro, which is the Fund’s functional and presentation currency.
21p21, 28, (b) Transactions and balances

52(a)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the
exchange rate prevailing at the statement of financial position date.
Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income.
21p28 Foreign exchange gains and losses relating to cash and cash equivalents are presented in the statement of
comprehensive income within ‘net foreign currency gains or losses on cash and cash equivalents’.
21p30 Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or
loss are presented in the statement of comprehensive income within ‘other net changes in fair value on financial
assets and financial liabilities at fair value through profit or loss’.
1p119 2.3 Financial assets and financial liabilities at fair value through profit or loss
IFRS7p21
IFRS9p4.1.1 (a) Classification
IFRS9pB4.1.6 (i) Assets

The Fund classifies its investments based on both the Fund’s business model for managing those financial
assets and the contractual cash flow characteristics of the financial assets. The portfolio of financial assets is
managed and performance is evaluated on a fair value basis. The Fund is primarily focused on fair value
information and uses that information to assess the assets’ performance and to make decisions. The Fund has
not taken the option to irrevocably designate any equity securities as fair value through other comprehensive
income. The contractual cash flows of the Fund’s debt securities are solely principal and interest, however, these
securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting
contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the
Fund’s business model’s objective. Consequently, all investments are measured at fair value through profit or
loss.
IFRS9p4.2.1 (ii) Liabilities

The Fund makes short sales in which a borrowed security is sold in anticipation of a decline in the market value of
that security, or it may use short sales for various arbitrage transactions. Short sales are held for trading and are
consequently classified as financial liabilities at fair value through profit or loss. Derivative contracts that have a
negative fair value are presented as liabilities at fair value through profit or loss.
As such, the Fund classifies all of its investment portfolio as financial assets or liabilities as fair value through profit or
loss.
The Fund’s policy requires the Investment Manager and the Board of Directors to evaluate the information about these
financial assets and liabilities on a fair value basis together with other related financial information.
Commentary – Determining business model under IFRS 9
IFRS 9 sets out three potential categories for financial assets. These are amortised cost, fair value through other
comprehensive income, and fair value through profit or loss. The following decision tree summarises the model
described in IFRS 9 which determines a financial asset’s relevant category.

Pursuant to IFRS 9, a portfolio of financial assets that is managed and whose performance is evaluated on a fair value
basis is neither held to collect contractual cash flows nor held both to collect contractual cash flows and to sell
financial assets. The entity is primarily focused on fair value information and uses that information to assess the
assets’ performance and to make decisions. In addition, a portfolio of financial assets that meets the definition of held
for trading is not held to collect contractual cash flows or held both to collect contractual cash flows and to sell
financial assets. For such portfolios, the collection of contractual cash flows is only incidental to achieving the
business model’s objective. Consequently, such portfolios of financial assets must be measured at fair value through
profit or loss [IFRS9pB4.1.6].
The evaluation of the performance of ABC Fund is done for the entire portfolio on a fair value basis, as is the reporting
to the key management personnel and to the investors. In this case, all equity, derivatives and debt investments form
part of the same portfolio for which the performance is evaluated on a fair value basis together and reported to the
key management personnel in its entirety. As all of ABC Fund’s investments are either held for trading and/or
managed and evaluated on a fair value basis, they have remained classified as fair value through profit or loss upon
adoption of IFRS 9. The adoption of IFRS 9 therefore has not resulted in any change to the classification or
measurement of financial assets, in either the current or prior period for ABC Fund.
If the portfolio is not all managed on a fair value basis, other criteria of IFRS 9 regarding the business model
assessment should be considered.
To determine the business model of a fund, the following areas should be considered:
& How does the fund manage its financial assets?
& How is the performance of the fund measured?
& What does the fund’s prospectus say about the management strategy and the risk factors to be considered when
investing into the fund?

& How does management communicate the achievements of the fund to investors?
& What is the measurement basis for the fund units at sale or redemption?
& How does the fund meet the redemption requests?
& How were the assets previously reported under IAS 39?
Further guidance on the determination of business model for a fund and how these questions impact that
determination can be found in PwC’s ‘IFRS 9: What’s new in financial instruments accounting for asset management’
published on inform.pwc.com in February 2018.
Significant accounting judgements in determining business model
The objective of ABC Fund is to achieve long-term capital appreciation and its portfolio is managed on a fair value
basis. ABC Fund therefore applies the business model allowed by IFRS 9pB4.1.6 which requires its portfolio to be
classified at fair value through profit or loss.
Determining the appropriate business model and assessing whether cash flows generated by an asset constitute
solely payments of principal and interest (SPPI) is sometimes complex and may require significant judgement.
Depending on the level of judgement and the amount of financial assets affected by the conclusion, the SPPI and/or
business model assessment may require disclosure as a significant judgement in accordance with IAS 1 p122.

IFRS7B5(c) (b) Recognition, derecognition and measurement
IFRS7p21, Regular purchases and sales of investments are recognised on the trade date – the date on which the Fund commits
IFRS9p3.2.2, to purchase or sell the investment. Financial assets and financial liabilities at fair value through profit or loss are initially
p3.1.2, p5.1.1
recognised at fair value. Transaction costs are expensed as incurred in the statement of comprehensive income.
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the
Fund has transferred substantially all risks and rewards of ownership.
When the Fund purchases an option, an amount equal to fair value which is based on the premium paid is recorded as
an asset. When the Fund writes an option, an amount equal to fair value which is based on the premium received by
the Fund is recorded as a liability. When options are closed, the difference between the premium and the amount paid
or received, net of brokerage commissions, or the full amount of the premium if the option expires worthless, is
recognized as a gain or loss and is presented in the statement of comprehensive income within other net changes in
fair value of financial assets and liabilities at fair value through profit or loss.
IFRS9p5.2.1 Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are
IFRS9p5.7.1 measured at fair value. Gains and losses arising from changes in the fair value of the ‘financial assets or financial
liabilities at fair value through profit or loss’ category are presented in the statement of comprehensive income within
other net changes in fair value of financial assets and liabilities at fair value through profit or loss in the period in which
they arise.
IFRS9p5.7.1A Dividend income from financial assets at fair value through profit or loss is recognised in the statement of
IFRS7AppxB5(e)comprehensive income within dividend income when the Fund’s right to receive payments is established. Interest on
debt securities at fair value through profit or loss is recognised in the statement of comprehensive income. Dividend
expense on short sales of equity securities is included within other net changes in fair value on financial assets and
financial liabilities at fair value through profit or loss.
(c) Fair value estimation
IFRS13p91 Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
IFRS13p70 between market participants at the measurement date. The fair value of financial assets and liabilities traded in active
markets1 (such as publicly traded derivatives and trading securities) are based on quoted market prices at the close of
trading on the reporting date2. The Fund utilises the last traded market price for both financial assets and financial
liabilities where the last traded price falls within the bid-ask spread. In circumstances where the last traded price is not
within the bid-ask spread, management will determine the point within the bid-ask spread that is most representative
of fair value.
Commentary – IFRS 13 and fair value estimation
According to IFRS13p70-71, if an asset or a liability measured at fair value has a bid price and an ask price (for
example an input from a dealer market), the price within the bid-ask spread that is most representative of fair value in
the circumstances should be used to measure fair value regardless of where the input is categorised within the fair
value. The use of bid prices for asset positions and ask prices for liability positions is permitted, but is not required.
This IFRS does not preclude the use of mid-market pricing or other pricing conventions that are used by market
participants as a practical expedient for fair value measurements within a bid-ask spread.
If a significant movement in fair value occurs subsequent to the close of trading up to midnight in Lagartos on the year
end date, valuation techniques will be applied to determine the fair value. A significant event is any event that occurs
after the last market price for a security, close of market or close of the foreign exchange, but before the Fund’s
valuation time that materially affects the integrity of the closing prices for any security, instrument, currency or
securities affected by that event so that they cannot be considered ‘readily available’ market quotations.3
IFRS13p62 The fair value of financial assets and liabilities that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques. The Fund uses a variety of methods and makes assumptions
that are based on market conditions existing at each reporting date. Valuation techniques used include the use of
comparable recent ordinary transactions between market participants, reference to other instruments that are
substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques
1
The existence of published price quotations in an active market is the best evidence of fair value and, when they are available, they are used to measure fair
value. The phrase ‘quoted in an active market’ means that quoted prices are readily and regularly available from an exchange, dealer, broker, industry group,
pricing service or regulatory agency. Those prices represent actual and regularly occurring market transactions on an arm’s length basis that are not
distressed sales. The price can be taken from the principal market or, in the absence of a principal market, the most advantageous market [IFRS13p16]. The
quoted market price cannot be adjusted for transaction costs [IFRS13p25]. The quoted market price cannot be adjusted for ‘blockage’ factors [IFRS13p69].
2
If investments are restricted – that is, they are a particular class of instrument, with a restriction in the terms of that class or issued with the restriction – that is
relevant in determining the fair value of investments. However, if the restriction is part of a separate agreement between the buyer and seller and the shares
are identical to other shares with no such restriction, that is not relevant to the valuation of the securities.
3
If a ‘significant event’ (for example, corporate action, corporate or regulatory news, suspension of trading, natural disaster, market fluctuations) occurs, the
Fund should consider whether the valuation model would reflect a more current value of the securities held by the Fund.

commonly used by market participants making the maximum use of market inputs and relying as little as possible on
entity-specific inputs.
(d) Transfers between levels of the fair value hierarchy
IFRS13p95 Transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting
period.
IFRS7p21 2.4 Offsetting financial instruments

1p119
32p42, Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
AG38B enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must
be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the company
or the counterparty.
IFRS7p21 2.5 Due from and due to brokers

1p119
Amounts due from and to brokers represent receivables for securities sold and payables for securities purchased that
have been contracted for but not yet settled or delivered on the statement of financial position date respectively. The
due from brokers balance is held for collection.
IFRS9p5.1.1, These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each reporting
p5.4.1, p5.5 date, the Fund shall measure the loss allowance on amounts due from broker at an amount equal to the lifetime
expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date, the
credit risk has not increased significantly since initial recognition, the Fund shall measure the loss allowance at an
amount equal to 12-month expected credit losses. Significant financial difficulties of the broker, probability that the
broker will enter bankruptcy or financial reorganisation, and default in payments are all considered indicators that a
loss allowance may be required. If the credit risk increases to the point that it is considered to be credit impaired,
interest income will be calculated based on the gross carrying amount adjusted for the loss allowance. A significant
increase in credit risk is defined by management as any contractual payment which is more than 30 days past due.
Any contractual payment which is more than 90 days past due is considered credit impaired.
Commentary – Expected credit losses
The Fund’s impairment policy aligns with the requirements of the IFRS 9 expected credit loss model. Certain factors,
such as what is deemed a ‘significant increase in credit risk’ and what is deemed to be an impairment, are inherently
judgemental. Entities should develop their own policies for such factors with consideration given to the application
guidance and rebuttable presumptions contained in IFRS 9.
Additional guidance can be found in PwC’s ‘IFRS 9: What’s new in financial instruments accounting for asset
management’ published on inform.pwc.com in February 2018.
IFRS7p21 2.6 Cash and cash equivalents

1p119
7p45, 7p46 Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term investments in
an active market with original maturities of three months or less1 and bank overdrafts. Bank overdrafts are shown in
current liabilities in the statement of financial position.
IFRS7p21 2.7 Accrued expenses

1p119
Accrued expenses are recognised initially at fair value and subsequently stated at amortised cost using the effective
interest method.
IFRS7p21 2.8 Redeemable shares

1p119
32p18 The Fund issues two classes of redeemable shares, which are redeemable at the holder’s option and do not have
IFRS9pB4.3.7 identical rights. Such shares are classified as financial liabilities. Redeemable shares can be put back to the Fund at
any dealing date for cash equal to a proportionate share of the Fund’s net asset value attributable to the share class.
Shares are redeemable weekly.
The redeemable shares are carried at amortised cost which corresponds to the redemption amount that is payable at
the statement of financial position date if the holder exercises the right to put the share back to the Fund.
Redeemable shares are issued and redeemed at the holder’s option at prices based on the Fund’s net asset value per
share at the time of issue or redemption. The Fund’s net asset value per share is calculated by dividing the net assets
1
Only non-restricted margin accounts should be included as part of cash and cash equivalents.

attributable to the holders of each class of redeemable shares with the total number of outstanding redeemable shares
for each respective class. In accordance with the provisions of the Fund’s regulations, investment positions are valued
based on the last traded market price for the purpose of determining the net asset value per share for subscriptions
and redemptions.
IFRS7p21 2.9 Interest income and interest from financial assets at fair value through profit or loss
1p119
IFRS9p5.4.1 Interest is recognised on a time-proportionate basis using the effective interest method. Interest income includes
interest from cash and cash equivalents. Interest from financial assets at fair value through profit or loss includes
interest from debt securities.
Commentary – IFRIC agenda decision on interest income
IFRS 9 introduced a consequential amendment to paragraph 82(a) of IAS 1, which is effective for accounting periods
beginning on or after 1 January 2018. Under this amendment, interest revenue calculated using the effective interest
method should be separately presented as a component of revenue on the face of the income statement.
The IFRS Interpretations Committee (the ‘Committee’) has issued an agenda decision which concludes that this
separate line item can be used only for interest on those financial assets that are measured at amortised cost or fair
value through other comprehensive income (subject to the effect of applying hedge accounting to derivatives in
designated hedge relationships).
This means that interest income on items that are not measured at amortised cost or fair value through other
comprehensive income will no longer be able to be included in the same line item.
Some entities might wish, as a matter of accounting policy, to present additional line items, on the face of the income
statement, for ‘interest’ on instruments measured at fair value through profit or loss. Whilst not addressed by the
Committee, IAS 1 permits an entity to present additional line items where doing so is relevant to an understanding of
the entity’s financial performance. If such a presentation is adopted, the additional line items should be appropriately
presented and labelled. Also, the entity’s accounting policy, including how such amounts are calculated and on
which instruments, should be disclosed.
2.10 Dividend income
IFRS9p5.7.1A Dividend income is recognised when the right to receive payment is established.
IFRS7p21 2.11 Transaction costs

1p119
Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss. They
include fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs, when incurred, are
immediately recognised in profit or loss as an expense.
IFRS7p21 2.12 Distributions payable to holders of redeemable shares

1p119
32IE32 Proposed distributions to holders of redeemable shares are recognised in the statement of comprehensive income
32p35, 40 when they are appropriately authorised and no longer at the discretion of the Fund. This typically occurs when
proposed distribution is ratified at the Annual General Meeting. The distribution on the redeemable shares is
recognised as a finance cost in the statement of comprehensive income.
IFRS7p21 2.13 Increase/decrease in net assets attributable to holders of redeemable shares from operations
1p119
Income not distributed is included in net assets attributable to holders of redeemable shares. Movements in net assets
attributable to holders of redeemable shares are recognised in the statement of comprehensive income as finance
costs.
IFRS7p21 2.14 Taxation1,2

1p119
The Fund is domiciled in Lagartos. Under the current laws of Lagartos, there is no income, estate, corporation, capital
gains or other taxes payable by the Fund.
The Fund currently incurs withholding taxes imposed by certain countries on investment income and capital gains.
Such income or gains are recorded gross of withholding taxes in the statement of comprehensive income.
Withholding taxes are shown as a separate item in the statement of comprehensive income.
1
Refer to Appendix VIII for investment funds with tax uncertainty.
2
If the entity is subject to government levies the policy note should be expanded to address the accounting treatment of these costs in accordance with
IFRIC 21.

2.15 Collateral
IFRS9IGD.1 Cash collateral provided by the Fund is identified in the statement of financial position as margin cash and is not
IFRS9p3.2.23 included as a component of cash and cash equivalents. For collateral other than cash, if the party to whom the
collateral is provided has the right by contract or custom to sell or re-pledge the collateral, the Fund classifies that
asset in its statement of financial position separately from other assets and identifies the asset as pledged collateral.
Where the party to whom the collateral is provided does not have the right to sell or re-pledge, a disclosure of the
collateral provided is made in the notes to the financial statements.
3. Financial risks
IFRS7p33 3.1 Financial risk factors
IFRS7p31 The Fund’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate
risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
DV The Fund is also exposed to operational risks such as custody risk. Custody risk is the risk of loss of securities held in
custody occasioned by the insolvency or negligence of the custodian. Although an appropriate legal framework is in
place that eliminates the risk of loss of value of the securities held by the custodian, in the event of its failure, the ability
of the Fund to transfer securities might be temporarily impaired.
The Fund’s overall risk management programme seeks to maximise the returns derived for the level of risk to which
the Fund is exposed and seeks to minimise potential adverse effects on the Fund’s financial performance. The Fund’s
policy allows it to use derivative financial instruments to both moderate and create certain risk exposures.
All securities investments present a risk of loss of capital. The maximum loss of capital on purchased options, long
equity and debt securities is limited to the fair value of those positions. On written call options, short future positions
and on equity and debt sold short, the maximum loss of capital can be unlimited. The maximum loss of capital on
written put options, long futures and forward currency contracts is limited to the notional contract values of those
positions.
The management of these risks is carried out by the investment manager under policies approved by the Board of
Directors. The Board provides written principles for overall risk management, as well as written policies covering
specific areas, such as foreign exchange risk, interest rate risk, credit risk, the use of derivative financial instruments
and non-derivative financial instruments and the investment of excess liquidity.
The Fund’s use of leverage and borrowings can increase the Fund’s exposure to these risks, which in turn can also
increase the potential returns the Fund can achieve. The Investment Manager manages these exposures on an
individual securities level. The Fund has specific limits on these instruments to manage the overall potential exposure.
These limits include the ability to borrow against the assets of the Fund up to a maximum e50 million or 50% of gross
assets, whichever is lower, and a limit on derivative contracts such that the net notional contract values should not
exceed 30% of net assets attributable to holders of redeemable shares.
The Fund uses different methods to measure and manage the various types of risk to which it is exposed; these
methods are explained below.
IFRS7p33 3.1.1 Market risk
(a) Price risk
IFRS7p33(a), The Fund is exposed to equity securities price risk and derivative price risk. This arises from investments held by the
33(b) Fund for which prices in the future are uncertain. Where non-monetary financial instruments – for example, equity
securities – are denominated in currencies other than the euro, the price initially expressed in foreign currency and
then converted into euros will also fluctuate because of changes in foreign exchange rates. Paragraph (b) ‘Foreign
exchange risk’ below sets out how this component of price risk is managed and measured.
The Fund’s policy is to manage price risk through diversification and selection of securities and other financial
instruments within specified limits set by the Board of Directors. Between 70% and 120% of the net assets attributable
to holders of redeemable shares is expected to be invested in equity securities and related derivatives. Between 60%
and 80% of this amount is expected to be in individual equities and the balance is in traded options and futures. A
summary analysis of investments by nature and geography is presented in Note 6.
The Fund’s policy also limits individual equity securities to no more than 5% of net assets attributable to holders of
redeemable shares.
The majority of the Fund’s equity investments are publicly traded and are included in the S&P 500 Index. The Fund’s
policy requires that the overall market position is monitored on a daily basis by the Fund’s Investment Manager and is
reviewed on a quarterly basis by the Board of Directors. Compliance with the Fund’s investment policies are reported
to the Board on a monthly basis.

At 31 December, the fair value of equities and related derivatives exposed to price risk were as follows:
Fair value
IFRS7p34 2019 2018
Equity securities 99,746 76,656
Equity related derivative assets 1,545 1,300
Equity related derivative liabilities (1,115) (538)
Equity securities sold short (10,548) (9,200)
Total 89,628 68,218
At 31 December, the Fund’s overall exposure to price risk including the notional exposure on derivative contracts were
as follows:
2019 2018
Net equity securities 89,198 67,456
Net notional exposure from futures contracts 22,000 16,250
Net notional exposure from options 28,000 17,000
Total exposure to price risk from equities and equity related derivatives 139,198 100,706
The Fund also manages its exposure to price risk by analysing the investment portfolio by industrial sector and
benchmarking the sector weighting to that of the S&P 500 Index. The Fund’s policy is to concentrate the investment
portfolio in sectors where management believe the Fund can maximise the returns derived for the level of risk to which
the Fund is exposed. The table below is a summary of the significant sector concentrations within the equity portfolio
(including Level 1, 2 and 3 equity securities), net of securities sold short.
IFRS7B8 At 31 December
2019 2018
Fund’s S&P 500 Fund’s S&P 500
equity benchmark equity benchmark
portfolio allocation portfolio allocation
Sector (%) (%) (%) (%)
Information technology 15.1 17.1 17.2 16.8
Financials 18.2 14.4 18.1 17.6
Energy 14.1 13.8 14.2 12.9
Health care 12.8 12.9 11.2 12.0
Consumer staples 9.8 11.6 11.5 10.2
Industrials 13.2 11.4 10.5 11.5
Consumer discretionary 9.9 8.4 10.2 8.5
Utilities 2.1 3.7 3.1 3.6
Materials 1.9 3.6 2.1 3.3
Telecommunications services 2.9 3.1 1.9 3.6
Total 100.0 100.0 100.0 100.0
The below table is a summary of derivatives held which gives rise to price risk.
At 31 December
2019 2018
Contract Contract
Derivative type Value Fair Value Value Fair Value
Futures
S&P 500 22,000 290 16,250 380
Total 22,000 290 16,250 380
Options
Purchased call options: S&P 500 30,000 400 19,125 300
Purchased put options: S&P 500 (12,000) 445 (9,625) 400
Written call options: S&P 500 (17,800) (300) (10,500) (115)
Written put options: S&P 500 27,800 (405) 18,000 (203)
Total 28,000 140 17,000 382

IFRS7p35 During the year ended 31 December 2019, the Fund’s exposure to various industry sectors was significantly different
from the exposure as at 31 December 2019. Specifically, the Fund’s exposure to the financial service sector during the
year averaged 7.5% (versus the S&P average of 17.9%) of the Fund’s equity portfolio. The Fund’s movement to the
overweight position in the financial services sector at 31 December 2019 was at the expense primarily of the
‘consumer staples’ and ‘utilities’ sectors which, while being in an overweight position during most of the period,
moved to an underweight position at 31 December 2019. Exposure as at 31 December 2018 is representative of the
exposures held throughout the year ending 31 December 2018.
The Fund had no concentrations in individual equity positions exceeding 3% (2018: 4%) of the net assets attributable
to holders of redeemable shares.
IFRS7p40 The table below summarises the sensitivity of the Fund’s net assets attributable to holders of redeemable shares to
equity price movements as at 31 December. The analysis is based on the assumptions that the S&P 500 Index
increased by 6% (2018: 7%) and decreased by 3% (2018: 3%), with all other variables held constant, and that the fair
value of the Fund’s portfolio of equity securities and equity-based derivatives moved according to their historical
correlation with the index. This represents management’s best estimate of a reasonable possible shift in the S&P 500
Index, having regard to the historical volatility of the index. The historical beta of the Fund’s equity portfolio with
upward movements in the index is 0.95 (2018: 0.90) of the index gain and 0.75 (2018: 0.80) of downward movements
in the index. The impact below arises from the reasonable possible change in the fair value of equities and equity
derivatives.1
2019 2018
Effect on net assets attributable to redeemable shares of an increase in the index 7,959 6,344
Effect on net assets attributable to redeemable shares of a decrease in the index (3,142) (2,416)
The Investment Manager uses the S&P 500 Index as a reference point in making investment decisions. However, the
investment manager does not manage the Fund’s investment strategy to track the S&P 500 Index or any other index
or external benchmark. The sensitivity analysis presented is based upon the portfolio composition as at 31 December
and the historical correlation of the securities comprising the portfolio to the respective indices. The composition of the
Fund’s investment portfolio, including the use of leverage, and the correlation thereof to the S&P 500 Index, is
expected to change over time. The sensitivity analysis prepared as of 31 December is not necessarily indicative of the
effect on the Fund’s net assets attributed to redeemable shares of future movements in the level of the S&P 500 Index.
Commentary – Risk exposure and consideration of derivative contract values
Although there is no specific requirement to disclose the contract/notional value of derivatives under IFRS,
management should disclose information that enables users of its financial statements to evaluate the nature and
extent of risks arising from financial instruments to which the entity is exposed at the end of the reporting period
[IFRS7p31]. The disclosures require focus on the risks that arise from financial instruments and how they have been
managed [IFRS7p31/32].
For each type of risk arising from financial instruments an entity is required to disclose concentrations of that risk
[IFRS7p34].
A derivative instrument typically provides leveraged exposure to a particular risk, the measure of which is not
reflected in the fair value of the instrument. In the case of ABC Fund, which holds futures and options linked to the
S&P 500 index, the net total exposure is e50,000, however the net fair value of these instruments is only e430. For the
purpose of addressing the IFRS7 risk disclosure requirements, ABC Fund must therefore disclose the total risk of
e50,000 as well as any concentrations within that risk. In this instance, the only concentration is to the S&P 500 index,
therefore this is disclosed.
Careful consideration must be given to the type of derivatives held when determining the nature of the exposures they
create. For instance, a fund that holds Contracts For Differences (‘CFDs’) in various equity positions should consider
the contract values when analysing exposure to particular geographic locations, industries and individual equities.
Similarly, when disclosing a concentration of risk, contract values should be considered. Derivatives which expose
the entity to foreign exchange risk or interest rate risk (for example, foreign exchange forward contracts and interest
rate swaps) will need to be considered and disclosed in a similar manner.
Additionally, when preparing a sensitivity analysis the effect of a reasonable possible movement in the risk variable
should be determined considering the effect of derivatives where relevant.
1
This includes the Level 3 equity positions. Note that the separate level 3 sensitivity analysis, which is based on valuation inputs, does not meet the
requirement to present a market sensitivity analysis.

(b) Foreign exchange risk
IFRS7 The Fund operates internationally and holds both monetary and non-monetary assets denominated in currencies
p33(a),(b) other than the euro, the functional currency. Foreign currency risk, as defined in IFRS 7, arises as the value of future
transactions, recognised monetary assets and monetary liabilities denominated in other currencies fluctuate due to
changes in foreign exchange rates. IFRS 7 considers the foreign exchange exposure relating to non-monetary assets
and liabilities to be a component of market price risk not foreign currency risk. However, management monitors the
exposure on all foreign currency denominated assets and liabilities. The table below provides analysis between
monetary and non-monetary items to meet the requirements of IFRS 7.
The Fund does not enter into any foreign exchange hedging transactions for the purpose of managing its exposure to
foreign exchange movements (both monetary and non-monetary).
When the Investment Manager formulates a view on the future direction of foreign exchange rates and the potential
impact on the Fund, the Investment Manager factors that into its portfolio allocation decisions. While the Fund has
direct exposure to foreign exchange rate changes on the price of non-euro-denominated securities, it may also be
indirectly affected by the impact of foreign exchange rate changes on the earnings of certain companies in which the
Fund invests, even if those companies’ securities are denominated in euro. For that reason, the below sensitivity
analysis may not necessarily indicate the total effect on the Fund’s net assets attributable to holders of redeemable
shares of future movements in foreign exchange rates.
The table below summarises the Fund’s assets and liabilities, monetary and non-monetary, which are denominated in
a currency other than the euro.
IFRS7p34(a) Concentration of foreign currency exposure
(Amounts in euro thousands)

At 31 December
2019 2018
USD GBP USD GBP
Assets
Monetary assets 4,024 10 1,894 –
Non-monetary assets 88,990 1,100 69,730 584
Liabilities
Monetary liabilities 605 – 398 –
Non-monetary liabilities 10,715 – 2,018 –
IFRS7p33(b) In accordance with the Fund’s policy, the Investment Manager monitors the Fund’s monetary and non-monetary
foreign exchange exposure on a daily basis, and the Board of Directors review it on a quarterly basis.
IFRS7p40 The table below summarises the sensitivity of the Fund’s monetary and non-monetary assets and liabilities to changes
IFRS7IG36 in foreign exchange movements at 31 December. The analysis is based on the assumptions that the relevant foreign
exchange rate increased/decreased by the percentage disclosed in the table below, with all other variables held
constant. This represents management’s best estimate of a reasonable possible shift in the foreign exchange rates,
having regard to historical volatility of those rates. This increase or decrease in the net assets attributable to holders of
redeemable shares arises mainly from a change in the fair value of US dollar equity and fixed interest securities and
UK equities that are classified as financial assets and liabilities at fair value through profit or loss.
Reasonable Reasonable
possible Movement possible Movement
shift in rate in value shift in rate in value
2019 2019 2018 2018
Currency
US dollars
IFRS7p40(a) – Monetary +/- 3% +/- 103 +/- 6% +/- 90
DV1
– Non-monetary +/- 3% +/- 2,348 +/- 6% +/- 4,063
Pounds sterling
IFRS7p40(a) – Monetary +/- 6% +/- 1 +/- 8% –
DV1
– Non-monetary +/- 6% +/- 66 +/- 8% +/- 47
1
Non-monetary sensitivity analysis is voluntary. In accordance with IFRS 7B23, currency risk does not arise from financial instruments that are non-monetary.

(c) Cash flow and fair value interest rate risk
IFRS7p33(a), Interest rate risk arises from the effects of fluctuations in the prevailing levels of markets interest rates on the fair value
(b) of financial assets and liabilities and future cash flow. The Fund holds fixed interest securities that expose the Fund to
fair value interest rate risk. The Fund also holds a limited amount of euro-denominated floating rate debt, cash and
cash equivalents that expose the Fund to cash flow interest rate risk. The Fund’s policy requires the Investment
Manager to manage this risk by measuring the mismatch of the interest rate sensitivity gap of financial assets and
liabilities and calculating the average duration of the portfolio of fixed interest securities. The average effective duration
of the Fund’s portfolio is a measure of the sensitivity of the fair value of the Fund’s fixed interest securities to changes
in market interest rates.
The Fund’s policy is to hold no more than 20% of the Fund’s net assets attributed to holders of redeemable shares in
interest bearing assets and liabilities and that the average effective duration of the fixed interest portfolio must remain
within 30% of the average duration of the ABC Bank US short-duration bond index. The table below summarises
the Fund’s relative sensitivity to interest rate changes versus its reference benchmark of the ABC Bank US short-
duration bond index. This measure of duration for the portfolio indicates the approximate percentage change in the
value of the portfolio if interest rates change by 100 basis points.
31 December
2019 2018
Fund Benchmark Fund Benchmark
Effective duration 2.01 2.75 1.86 2.25
IFRS7p40 At 31 December 2019, if interest rates on euro-denominated assets and liabilities had been lower by 75 basis points
IFRS7IG36 with all other variables held constant, the increase in net assets attributable to redeemable shareholders would
have been e286 (2018: e127). This arises substantially from the increase in the fair value of fixed interest securities,
with a small portion affecting interest rate futures1 e5 (2018: e nil). If interest rates on euro-denominated assets and
liabilities had been higher by 50 basis points, the decrease in net assets attributable to redeemable shareholders
would amount to e190 (2018: e85).
At 31 December 2019, if interest rates on USD-denominated assets had been 25 basis points lower/higher with all
other variables held constant, the change in net asset attributable to redeemable shareholders would have been e11
(2018: e9) higher/lower. This primarily arises from the increase/decrease in the fair value of fixed interest securities,
with a small proportion arising from the decrease/increase in interest income on cash and cash equivalents of e1
(2018: e1).
The Fund has direct exposure to interest rate changes on the valuation and cash flows of its interest bearing assets
and liabilities. However, it may also be indirectly affected by the impact of interest rate changes on the earnings of
certain companies in which the Fund invests. Therefore, the above sensitivity analysis may not fully indicate the total
effect on the Fund’s net assets attributable to holders of redeemable shares of future movements in interest rates.
IFRS7p33 In accordance with the Fund’s policy, the Investment Manager monitors the Fund’s overall interest sensitivity on a
daily basis; the Board of Directors reviews it on a quarterly basis.
3.1.2 Liquidity risk
IFRS7p39(c), Liquidity risk is the risk that the Fund may not be able to generate sufficient cash resources to settle its obligations in
IFRS7p33(a), full as they fall due or can only do so on terms that are materially disadvantageous.
(b)
The Fund is exposed to the daily settlement of margin calls on derivatives and to weekly cash redemptions of
redeemable shares. Its policy is therefore to invest the majority of its assets in investments that are traded in an active
market and can be readily disposed. Only a limited proportion of its assets in investments are not actively traded on a
stock exchange.
The Fund’s listed securities are considered readily realisable, as the majority are listed on the New York stock
exchange.
The Fund may periodically invest in derivative contracts and debt securities that are traded over the counter and
unlisted equity investments that are not traded in an active market. As a result, the Fund may not be able to liquidate
quickly its investments in these instruments at an amount close to their fair value to meet its liquidity requirements, or
be able to respond to specific events such as deterioration in the creditworthiness of any particular issuer.
7p50(a) The Fund has the ability to borrow in the short term to ensure settlement. No such borrowings have arisen during the
year. The maximum amount available to the Fund from this borrowing facility is limited to the lower of e50 million
or to 50% of the gross assets and would be secured by the assets of the Fund. This facility bears interest at 1 week
USD LIBOR plus 25 basis points.
In order to manage the Fund’s overall liquidity, the Fund also has the ability to withhold 25% of weekly redemption
requests for a period of no more than one month. Under extraordinary circumstances the Fund also has the ability to
1
Note that interest rate risk sensitivity from interest linked derivatives should be based on notional values as this represents the actual exposure.

suspend redemptions if this is deemed to be in the best interest of all shareholders. The Fund did not withhold any
redemptions or implement any suspension during 2019 and 2018.
In accordance with the Fund’s policy, the Investment Manager monitors the Fund’s liquidity position on a daily basis;
the Board of Directors reviews it on a quarterly basis.
IFRS7p39(a) The table below analyses the Fund’s non-derivative financial liabilities into relevant maturity groupings based on the
remaining period at the statement of financial position date to the contractual maturity date. The amounts in the table
are the contractual undiscounted cash flows and are based on the assumption that the Fund exercises its ability to
withhold 25% of weekly redemptions.
Less than 7 7 days to 1

At 31 December 2019 days month
Financial liabilities at fair value through profit or loss 10,548 –
Due to brokers 893 –
Accrued expenses 158 99
Net asset attributable to holders of redeemable shares 85,814 28,600
Contractual cash out flows (excluding derivatives) 97,413 28,699
At 31 December 2018
Financial liabilities at fair value through profit or loss 9,200 –
Due to brokers 665 –
Net asset attributable to holders of redeemable shares 63,504 21,170
Contractual cash out flows (excluding derivatives) 73,464 21,220
Redeemable shares are redeemed on demand at the holder’s option (Note 2.8). However, the Board of Directors does
not envisage that the contractual maturity disclosed in the table above will be representative of the actual cash
outflows, as holders of these instruments typically retain them for the medium to long term. At 31 December 2019 and
2018, no individual investor held more than 10% of the Fund’s redeemable shares.
IFRS7B11E The Fund manages its liquidity risk by investing predominantly in securities that it expects to be able to liquidate within
7 days or less. The following table illustrates the expected liquidity of assets held:*
Less than 7 days to 1–12 More than

At 31 December 2019 7 days 1 month months 12 months
Total assets 111,479 7,850 7,298 600
Less than 7 days to 1 1–12 More than

At 31 December 2018 7 days month months 12 months
Total assets 91,053 3,778 306 85
Commentary – Asset liquidity
* IFRS 7B11E states that an entity shall disclose a maturity analysis of financial assets it holds for managing liquidity
risk if that information is necessary to enable users of its financial statements to evaluate the nature and extent of
liquidity risk. It is acceptable to present this analysis in narrative format or tabular format.
Careful consideration must be given to the nature of assets held when categorizing within liquidity buckets. For
instance, emerging market debt instruments may have a different liquidity profile from developed market debt
instruments.

IFRS7p39(b) The table below analyses the Fund’s derivative financial instruments in a loss position for which the contractual
maturities are considered to be essential to an understanding of the timing of cash flows based on the Fund’s
investment strategy.
Less than 7 days to 1–12 More than
7 days 1 month months 12 months
At 31 December 2019
Net settled derivatives
– S&P Futures1 310 45 40 15
– S&P Options 355 350 –
At 31 December 2018
Net settled derivatives
– S&P Futures – 110 100 10
– S&P Options 318 – – –
Commentary – Liquidity risk disclosures and derivatives
Gross settled derivatives

An entity is required to disclose its gross cash outflows on gross settled derivatives (IFRS7B11D(d)). A foreign
exchange forward contract is an example of a derivative instrument which is commonly settled on a gross basis rather
than at net. There is no explicit requirement to disclose the corresponding inflow. However, IFRS7B11E requires an
entity to disclose a maturity analysis of financial assets it holds for managing liquidity risk if that information is
necessary to enable users of its financial statements to evaluate the nature and extent of liquidity risk.
Expected maturity vs contractual maturity

Amended IFRS 7p39(b) states: ‘the maturity analysis shall include the remaining contractual maturities for those
derivative financial liabilities for which contractual maturities are essential for an understanding of the timing of the
cash flows’. When more relevant, the information will be presented based on expected maturities rather than
contractual maturities.
IFRS7p33 3.1.3 Credit risk
IFRS7p33(a), The Fund is exposed to credit risk, which is the risk that one party to a financial instrument will cause a financial loss for
(b) the other party by failing to discharge an obligation.
The main concentration to which the Fund is exposed arises from the Fund’s investments in debt securities. The Fund
is also exposed to counterparty credit risk on trading derivative products, cash and cash equivalents, amounts due
from brokers and other receivable balances.
The Fund’s policy to manage this risk is to invest in debt securities that have a minimum credit rating of BBB/Baa as
designated by a well-known rating agency, Ratings plc, with no more than 50% of the debt portfolio rated less than AA/
Aa. Within the above limits, the Fund may also invest in unrated assets where a rating is assigned by the investment
manager using an approach that is consistent with the approach used by that rating agency. The analysis below
summarises the credit quality of the Fund’s debt portfolio at 31 December.
DV Debt securities by rating category 2019 2018

AAA/Aaa 40% 45%
AA/Aa 20% 23%
A/A 15% 13%
BBB/Baa 13% 10%
Unrated* 12% 9%
Total 100% 100%
*In order to monitor the credit quality of the ‘‘Unrated’’ underlying debt securities, the investment manager, on the basis of internal research,
prepares its own shadow ratings for the various instruments for which publically available credit ratings are not available. The investment
manager reviews the key financial metrics of the issue and structural features of the instruments in order to calculate the implied ratings for each
of these investments. The majority of unrated securities have been assessed by the investment manager to have credit quality consistent with
BBB/Baa rated securities. A BBB/Baa rating is the lowest rating a bond can have and still be considered investment-grade. An investment grade
bond is a bond considered to have a relatively low risk of default.
All other receivables, amounts due from brokers, cash and short-term deposits are held by parties with a credit rating
of AA/Aa or higher.
1
The net settled derivatives that have a negative fair value at the reporting date (that is, those that are liabilities) are included in the above liquidity analysis at
contractual undiscounted amounts. Net settled derivatives that have a positive fair value (that is, those that are assets) may also be included; however, this is
not a requirement of IFRS 7. IFRS 7B10A requires that if the cash outflows can be significantly different from the amounts indicated in the liquidity analysis (for
example, in the case of a net settled derivative for which the counterparty has the option to require gross settlement), the entity states that fact and provides
quantitative information that enables users of the financial statements to evaluate the extent of that risk.

The Fund also restricts its exposure to credit losses on the trading derivative instruments it holds by entering into
master netting arrangements with counterparties (approved brokers) with whom it undertakes a significant volume of
transactions. Master netting arrangements do not result in an offset of statement of financial position assets and
liabilities, as transactions are usually settled on a gross basis. However, the credit risk associated with favourable
contracts is reduced by a master netting arrangement to the extent that if an event of default occurs, all amounts with
the counterparty are terminated and settled on a net basis. The Fund’s overall exposure to credit risk on derivative
instruments subject to a master netting arrangement can change substantially within a short period, as it is affected by
each transaction subject to the arrangement. Refer to note 3.1.4 for further analysis of the Funds master netting
arrangements.
All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is
considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is
made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet
its obligation.
In accordance with the Fund’s policy, the Investment Manager monitors the Fund’s credit position on a daily basis; the
Board of Directors reviews it on a quarterly basis.
IFRS7p36(a) The maximum exposure to credit risk before any credit enhancements at 31 December is the carrying amount of the
IFRS7p34 financial assets as set out below.1
2019 2018
Debt securities 20,382 15,286
Derivative assets 1,600 1,300
Cash and cash equivalents 1,620 325
Other assets 3,879 1,655
Total 27,481 18,566
IFRS7p35F The Fund measures credit risk and expected credit losses using probability of default, exposure at default and loss
given default. Management consider both historical analysis and forward looking information in determining any
expected credit loss. At 31 December 2019 and 31 December 2018, all other receivables, amounts due from brokers,
cash and short-term deposits are held with counterparties with a credit rating of AA/Aa or higher and are due to be
settled within 1 week. Management consider the probability of default to be close to zero as the counterparties have a
strong capacity to meet their contractual obligations in the near term. As a result, no loss allowance has been
recognised based on 12-month expected credit losses as any such impairment would be wholly insignificant to the
Fund.
Commentary – IFRS 7 credit risk disclosures
There are significant disclosure requirements surrounding credit risk and impairment that are not relevant for
ABC Fund but which may be relevant for other entities. Further illustrative guidance on the disclosure requirements of
IFRS 9 can be found in PwC’s ‘VALUE IFRS Plc: Illustrative IFRS consolidated financial statements December 2019’
publication, which is supplemented by ‘IFRS 9 disclosures for corporates: a practice aid’. Both are available on
inform.pwc.com.
The clearing and depository operations for the Fund’s security transactions are mainly concentrated with one prime
broker, namely Custodian plc. Custodian plc is a member of a major securities exchange, and at 31 December 2019
had a credit rating of Aa (2018: Aa). At 31 December 2019 and 31 December 2018, substantially all cash and cash
equivalents, balances due from broker and investments are placed in custody with Custodian plc.
IFRS7p14 The Fund has provided Custodian plc with a general lien over all assets (excluding cash2) held in custody in return for
IFRS7p36 services including borrowed securities and derivatives trading. Custodian plc has the right to sell or re-pledge up to
125% (2018: nil) of the collateral received to the extent of equity securities sold short and the fair value of derivatives in
a loss position. The Fund is therefore also exposed to credit risk to Custodian plc to the extent that collateral provided
has been sold or re-pledged. There are also risks involved in dealing with custodians or brokers who settle trades with
regard to the segregation of assets. It is expected that all securities and other assets deposited with custodians or
brokers will be clearly identified as being assets of the Fund; the Fund should not therefore be exposed to a credit risk
with respect to such parties. However, it may not always be possible to achieve this segregation, so the portfolio of the
Fund may experience increased exposure to credit risk associated with the applicable custodians or brokers.
1
IFRS7p36(a); Disclosure of the amount that best represents the maximum exposure to credit risk is not required for financial instruments whose carrying
amount best represents the maximum exposure to credit risk.
2
If cash collateral was provided for a specific transaction, the Fund would separately identify the collateral as ‘margin cash’ or a ‘receivable’ and not include
the amount as part of ‘cash and cash equivalents’ [IFRS9 IE D.1.1].

Commentary – Derivatives and risk disclosures
When making the required IFRS 7 risk disclosures illustrated above, careful thought must be given to the risk
exposures created by the various derivative instruments that the fund may hold. For most derivatives, the notional or
contract value of the instrument would determine the total risk exposure. These exposures need to be incorporated
into the respective quantitative disclosures and sensitivity analysis where applicable.
1p134, 1p135 3.1.4 Offsetting and amounts subject to master netting arrangements and similar agreements
As at 31 December 2019 and 2018 the Fund was subject to one master netting arrangement with its sole derivative
counterparty. All of the derivative assets and liabilities of the Fund are held with this counterparty and the margin
balance maintained by the Fund is for the purpose of providing collateral on derivative positions.
IFRS7p13C The following tables present the Fund’s financial assets and liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements. The tables are presented by type of financial instrument.
Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements:
A B C = A-B D E = C-D
Gross amounts Gross amounts Net amounts of Related amounts not set-off in the
of recognised of recognised financial assets statement of financial position
financial assets financial presented in
D(i) and D(ii) D(ii) Cash Net amount
liabilities the statement
Financial collateral
set-off in the of financial
Instruments received
statement of position
financial
position
Description
2019: Derivatives assets 1,600 – 1,600 1,115 – 485
2018: Derivatives assets 1,300 – 1,300 538 – 762
Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements:
Gross amounts Gross amounts Net amounts Related amounts not set-off in the
of recognised of recognised of financial statement of financial position
financial financial assets liabilities
liabilities set-off in the presented in
statement of the statement
financial of financial
position position
Description
2019: Derivatives liabilities 1,115 – 1,115 1,115 – –
2018: Derivatives liabilities 538 – 538 538 – –
Amounts in D(i) and D(ii) above relate to amounts subject to set-off that do not qualify for offsetting under (B) above.
This includes (i) amounts which are subject to set-off against the asset (or liability) disclosed in ‘A’ which have not
been offset in the statement of financial position, and (ii) any financial collateral (including cash collateral), both
received and pledged.
IFRS7p13E, The Fund and its counterparty have elected to settle all transactions on a gross basis however, each party has the
B50 option to settle all open contracts on a net basis in the event of default of the other party. Per the terms of the master
netting agreement, an event of default includes the following:
– failure by a party to make payment when due;
– failure by a party to perform any obligation required by the agreement (other than payment) if such failure is not
remidied within 30 days after notice of such failure is given to the party;
– bankruptcy.

Commentary – Offsetting and amounts subject to master netting arrangements and

similar agreements
The illustrative disclosure provided above is minimal and deals with a non-complex arrangement. For further detailed
guidance and illustrative disclosure on the Amendments to IFRS 7, ‘Disclosures – Offsetting financial assets and
financial liabilities’, refer to Appendix X.
1p134, 1p135 3.2 Capital risk management
The capital of the Fund is represented by the net assets attributable to holders of redeemable shares. The amount of
net asset attributable to holders of redeemable shares can change significantly on a weekly basis, as the Fund is
subject to weekly subscriptions and redemptions at the discretion of shareholders, as well as changes resulting from
the Fund’s performance. The Fund’s objective when managing capital is to safeguard the Fund’s ability to continue as
a going concern in order to provide returns for shareholders, provide benefits for other stakeholders and maintain a
strong capital base to support the development of the investment activities of the Fund.
In order to maintain the capital structure, the Fund’s policy is to perform the following:
. Monitor the level of weekly subscriptions and redemptions relative to the assets it expects to be able to liquidate
within 7 days and adjust the amount of distributions the Fund pays to redeemable shareholders.
. Redeem and issue new shares in accordance with the constitutional documents of the Fund, which include the
ability to restrict redemptions and require certain minimum holdings and subscriptions.
The Board of Directors and Investment Manager monitor capital on the basis of the value of net assets attributable to
redeemable shareholders.
3.3 Fair value estimation
IFRS13p70 The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and trading
securities) are based on quoted market prices at the close of trading on the year end date. The Fund utilises the last
traded market price for both financial assets and financial liabilities. If a significant movement in fair value occurs
subsequent to the close of trading up to midnight in Lagartos on the year end date, valuation techniques will be
applied to determine the fair value.
An active market is a market in which transactions for the asset or liability take place with sufficient frequency and
volume to provide pricing information on an ongoing basis.
The fair value of financial assets and liabilities that are not traded in an active market is determined by using valuation
techniques. The Fund uses a variety of methods and makes assumptions that are based on market conditions existing
at each year end date. Valuation techniques used for non-standardised financial instruments such as options,
currency swaps and other over-the-counter derivatives, include the use of comparable recent arm’s length
transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option
pricing models and other valuation techniques commonly used by market participants making the maximum use of
market inputs and relying as little as possible on entity-specific inputs.
For instruments for which there is no active market, the Fund may use internally developed models, which are usually
based on valuation methods and techniques generally recognised as standard within the industry. Valuation models
are used primarily to value unlisted equity, debt securities and other debt instruments for which markets were or have
been inactive during the financial year. Some of the inputs to these models may not be market observable and are
therefore estimated based on assumptions.
The output of a model is always an estimate or approximation of a value that cannot be determined with certainty, and
valuation techniques employed may not fully reflect all factors relevant to the positions the Fund holds. Valuations are
therefore adjusted, where appropriate, to allow for additional factors including model risk, liquidity risk and
counterparty risk.
IFRS7p29(a) The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair
values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the Fund for similar financial instruments.
IFRS13p93(b) The fair value hierarchy has the following levels:

. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
. Level 3 inputs are unobservable inputs for the asset or liability.

Commentary – IFRS 13
The overall disclosure objective of IFRS 13 is for an entity to disclose information that helps users of its financial
statements assess both of the following:
. For assets and liabilities that are measured at fair value on a recurring or non-recurring basis in the statement of
financial position after initial recognition, the valuation techniques and inputs used to develop those
measurements; and
. For recurring fair value measurements using significant unobservable inputs (Level 3), the effect of the
measurements on profit or loss or other comprehensive income for the period.
Recurring fair value measurements of assets or liabilities are those that other IFRSs require or permit in the statement
of financial position at the end of each reporting period. Non-recurring fair value measurements of assets or liabilities
are those that other IFRSs require or permit in the statement of financial position in particular circumstances.
In the vast majority of cases, it can be expected that a fund would only have recurring fair value measurements on its
statement of financial position.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined
on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose,
the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement
uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a
Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement by the Fund. The Fund considers
observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable,
not proprietary, and provided by independent sources that are actively involved in the relevant market.
The following table analyses within the fair value hierarchy the Fund’s assets and liabilities (by class) measured at fair
value at 31 December 20191.
All fair value measurements disclosed are recurring fair value measurements2.
IFRS13p93(a),
(b) Level 1 Level 2 Level 3 Total balance
Assets
Financial assets at fair value through profit or loss:
Equity securities
Eurozone
Industrial 11,774 – – 11,774
United States
Information technology 13,469 – – 13,469
Financials 13,540 2,694 – 16,234
Health care 11,417 – – 11,417
Consumer staples 8,741 3,250 7,298 19,289
Energy 8,500 4,077 – 12,577
Consumer discretionary 4,650 4,181 – 8,831
Other sectors 4,800 1,355 6,155
Derivatives
Listed options 845 – – 845
Listed futures 755 – – 755
Debt securities
US Treasury bills 2,000 – – 2,000
Eurozone sovereign 11,499 4,501 – 16,000
Eurozone corporate – 1,600 – 1,600
United States corporate – 182 600 782
Total assets at fair value through profit or loss 91,990 21,840 7,898 121,728
Liabilities
Financial liabilities at fair value through profit or loss:
Equity securities sold short
United States
Consumer staples 6,198 4,350 – 10,548
Derivatives
Total liabilities at fair value through profit or loss 7,313 4,350 – 11,663
1
Valuation hierarchy disclosures should be given by class of asset and liability measured at fair value [IFR13p93(b)]. The concept of disclosure by ‘class’
existed prior to IFRS13; however, the standard provides further clarification on what should be considered in determining appropriate classes of assets and
liabilities. Factors to consider would be the nature, characteristics and risks of the asset and liability as well as the level of the fair value hierarchy in which the
measurement is categorised. Greater disaggregation of classes may be needed for Level 3 due to the degree of uncertainty and subjectivity [IFRS13p94].
2
This table follows the illustrative guidance in IFRS13pIE60.

The following table analyses within the fair value hierarchy the Fund’s assets and liabilities measured at fair value at
31 December 2018.
Level 1 Level 2 Level 3 Total balance
Assets
Equity securities:
Eurozone
Industrial 6,523 – – 6,523
Other 491 – – 491
United States
Information technology 10,685 – – 10,685
Financials 11,244 – – 11,244
Health care 6,572 – – 6,572
Consumer staples 13,964 3,600 306 17,870
Energy 3,745 5,077 – 8,822
Consumer discretionary 6,337 – – 6,337
Other sectors 8,112 – – 8,112
Derivatives:
Debt securities:
US Treasury bills 1,000 – – 1,000
Eurozone sovereign 9,700 4,000 – 13,700
United States corporate – 501 85 586
Total assets at fair value through profit or loss 79,673 13,178 391 93,242
Liabilities
Financial liabilities at fair value through profit or loss:
Equity securities sold short
United States
Consumer staples 4,850 4,350 – 9,200
Derivatives
Total liabilities at fair value through profit or loss 5,388 4,350 – 9,738
Commentary – Classes of assets and liabilities
IFRS13p94 states that an entity should determine appropriate classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability; and the level of the fair value hierarchy within which the fair
value measurement is categorised. The number of classes may need to be greater for fair value measurements
categorised within Level 3 of the fair value hierarchy because those measurements have a greater degree of
uncertainty and subjectivity. An entity should provide information sufficient to permit reconciliation to the line items
presented in the statement of financial position.
All disclosure requirements of IFRS13p93, which are dealt with in the remainder of this note, are required to be made
by class of assets and liabilities.
Investments whose values are based on quoted market prices in active markets, and are therefore classified within
Level 1, include active listed equities, exchange traded derivatives, US government treasury bills and certain non-US
sovereign obligations. The Fund does not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market
prices, dealer quotations or alternative pricing sources1 supported by observable inputs are classified within Level 2.
These include investment-grade corporate bonds and certain non-US sovereign obligations, listed equities and over-
the-counter derivatives. As Level 2 investments include positions that are not traded in active markets and/or are
subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are
generally based on available market information.
Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently. Level 3
instruments include private equity and corporate debt securities. As observable prices are not available for these
securities, the Fund has used valuation techniques to derive the fair value.
1
In cases where funds utilise broker quotes to assess valuation, it is important to identify whether the quotes are binding and executable or indicative and not
executable. Binding quotes would support a level 2 classification; however, if a quote is just indicative, this may result in level 3.

IFRS13p93(g) Level 3 valuations are reviewed on a weekly basis by the Fund’s valuation committee who report to the Board of
Directors on a monthly basis. The committee considers the appropriateness of the valuation model inputs, as well as
the valuation result using various valuation methods and techniques generally recognised as standard within the
industry. In selecting the most appropriate valuation model the committee performs back testing and considers which
model’s results have historically aligned most closely to actual market transactions.*
Commentary – Level 3 valuation process
* For fair value measurements categorised within Level 3 of the fair value hierarchy, an entity is required to disclose a
description of the valuation processes used by the entity (including, for example, how an entity decides its valuation
policies and procedures and analyses changes in fair value measurements from period to period) [IFRS13p93(g)]. To
satisfy this requirement, the illustrative example provided in IFRS 13 states that an entity might disclose information,
such as the group within the entity that decides the entity’s valuation policies and procedures, to whom that group
reports, the frequency and methods for calibration, back testing and other testing procedures of pricing models, etc.
[IFRS13pIE65].
The Level 3 equity that amounts to e7,298 consists of private equity positions. The Fund utilises comparable trading
multiples in arriving at the valuation for these positions. Management determines comparable public companies
(peers) based on industry, size, developmental stage and strategy. Management then calculates a trading multiple for
each comparable company identified. The multiple is calculated by dividing the enterprise value of the comparable
company by its earnings before interest, taxes, depreciation and amortisation (EBITDA). The trading multiple is then
discounted for considerations such as illiquidity and differences between the comparable companies based on
company-specific facts and circumstances.
The Level 3 debt that amounts to e600 consists of US corporate debt positions. The Fund values these instruments
using the net present value of estimated future cash flows. The Fund also considers other liquidity, credit and market
risk factors, and adjusts the valuation model as deemed necessary.
IFRS13p93(d), Reasonable
(h) possible
Weighted shift +/- Change in
Fair value at Valuation Unobservable average (absolute Valuation
Description 31 Dec 2019 Technique Inputs input ** value) +/-
US equity 7,298 Comparable EBITDA multiple 9.5 1 605/(605)
securities: trading
– Consumer multiples
Discount for lack of
staples
marketability 10% 5% (405)/405
Control premium 12% 6% 487/(487)
Debt securities: 600 Discounted Cost of capital 10% 2% (24)/24
– US corporate cash flows
Probability of
default 15% 10% (75)/75
Reasonable
possible
Weighted shift +/- Change in
Fair value at Valuation Unobservable average (absolute Valuation
Description 31 Dec 2018 Technique Inputs input ** value) +/-
US equity 306 Comparable EBITDA multiple 8.5 1 30/(30)
securities: trading
– Consumer multiples
Discount for lack of
staples
marketability 15% 5% (18)/18
Control premium 12% 6% 20/(20)
Debt securities: 85 Discounted Cost of capital 10% 2% (3)/3
– US corporate cash flows
Probability of
default 18% 10% (12)/12

IFRS13p93(h), The change in valuation disclosed in the above table shows the direction an increase or decrease in the respective
(i) input variables would have on the valuation result. For equity securities, increases in the EBITDA multiple and control
premium inputs would each lead to an increase in estimated value. However, an increase in the discount for lack of
marketability would lead to a decrease in value. For debt securities, increases in cost of capital and probability of
default would both lead to a decrease in estimated value1.
No interrelationships between unobservable inputs used in the Fund’s valuation of its Level 3 equity investments have
been identified. However, for Level 3 debt securities, a change in the assumption used for the probability of default is
expected to be accompanied by a directionally similar change in the cost of capital2.
Commentary – Level 3 disclosure
** For fair value measurements categorised within Level 3 of the fair value hierarchy, quantitative information
about the significant unobservable inputs used in the fair value measurement should be provided.
An entity is not required to create quantitative information to comply with this disclosure requirement if quantitative
unobservable inputs are not developed by the entity when measuring fair value (for example, when an entity uses
prices from prior transactions or third-party pricing information without adjustment). However, when providing this
disclosure, an entity cannot ignore quantitative unobservable inputs that are significant to the fair value measurement
and are reasonably available to the entity [IFRS13p93(d)].
This needs to be presented in addition to the sensitivity analysis.
IFRS13p93(c), The following table presents the transfers between levels for the year ended 31 December 2019.
(e)
Level 1 Level 2 Level 3
Transfers between Levels 1 and 2:
US equities securities
Financial sector (2,200) 2,200 –
Consumer discretionary (3,520) 3,520 –
United States corporate – (450) 450
The equity securities transferred out of Level 1 relate to positions whose trading was inactive as at 31 December 2019
but was actively traded on 31 December 2018. The debt transferred from Level 2 to Level 3 relates to a single
corporate debt security whose issuer experienced financial difficulty during the year. This ultimately resulted in a halt
in trading activity on all of its issued debt instruments. The valuation inputs for this security were not therefore based
on market observable inputs and resulted in the reclassification to Level 3.
The following table presents the transfers between levels for the year ended 31 December 2018.
Level 1 Level 2 Level 3

US equities securities
Consumer staples (525) 525 –
Consumer discretionary 1,012 (1,012) –
Transfers between levels 2 and 3:
United States corporate – (600) 600
The equity securities transferred out of level 1 relate to positions whose trading was inactive as at 31 December 2018
but was actively traded on 31 December 2017. The equity securities transferred into Level 1 relate to positions for
which significant trading activity existed on 31 December 2018 but which were only thinly traded on and around
31 December 2017. The transfer from Level 2 to Level 3 relates to corporate debt securities whose issuers
experienced significant reductions in trading activity during the year as well as significant credit rating downgrades.
The valuation inputs for these securities were not therefore based on market observable inputs and resulted in the
reclassification to Level 3.
IFRS13p95 Transfers between levels of the fair value hierarchy, for the purpose of preparing the above table, are deemed to have
occurred at the beginning of the reporting period.***
1
A narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs is required if a change in those inputs might result
in a significantly higher or lower fair value measurement. [IFRS13p93(h)(i)].
2
If there are interrelationships between those inputs and other unobservable inputs used in the fair value measurement, a description of those
interrelationships and of how they might magnify or mitigate the effect of changes in the unobservable inputs on the fair value measurement is required to be
disclosed [IFRS13p93(h)(i)].

Commentary – Transfers
An entity should disclose the amounts of any transfers between levels of the fair value hierarchy, the reasons for
those transfers and the entity’s policy for determining when transfers between levels are deemed to have occurred.
Transfers into each level should be disclosed and discussed separately from transfers out of each level
[IFRS13p93(c),(e)(iv), p95].
*** The policy with regard to the timing of the recognition of transfers should be the same for transfers into the levels
as for transfers out of the levels. Examples of policies for determining the timing of transfers include the following
[IFRS13p95]:
. The date of the event or change in circumstances that caused the transfer.
. The beginning of the reporting period.
. The end of the reporting period.
IFRS13p93(e) The following table presents the movement in level 3 instruments for the year ended 31 December 2019 by class of
financial instrument.
US equity
securities – US
consumer corporate
staples debt Total
Opening balance 306 85 391
Purchases 6,500 – 6,500
Sales (850) (20) (870)
Transfers into Level 3 – 450 450
Net gains/(losses) recognised in other net changes in fair value on
financial assets and financial liabilities at fair value through profit or loss 1,342 85 1,427
Closing balance 7,298 600 7,898
Change in unrealised gains or losses for Level 3 assets held at year end
and included in other net changes in fair value on financial assets and
financial liabilities at fair value through profit or loss**** 1,292 80 1,372
The following table presents the movement in Level 3 instruments for the year ended 31 December 2018 by class of
financial instrument.
US equity
securities – US
consumer corporate
staples debt Total
Opening balance – – –
Purchases 450 – 450
Sales (150) (400) (550)
Transfers into level 3 – 600 600
Net gains/(losses) recognised in other net changes in fair value on
financial assets and financial liabilities at fair value through profit or loss 6 (115) (109)
Closing balance 306 85 391
Change in unrealised gains or losses for Level 3 assets held at year end
and included in other net changes in fair value on financial assets and
financial liabilities at fair value through profit or loss **** 4 (25) (21)
Commentary – Level 3 assets and liabilities held at year end
**** IFRS 13 clarifies that for Level 3 positions, the amount of the total gains or losses for the period included in profit
or loss that is attributable to the change in unrealised gains or losses relating to those assets and liabilities held at the
end of the reporting period, and the line item(s) in profit or loss in which those unrealised gains or losses are
recognised, should be disclosed [IFRS13p93(f)].
IFRS13p97 For assets and liabilities carried at amortised cost, their carrying values are a reasonable approximation of fair value.

Commentary – Assets and liabilities not carried at fair value but for which fair value is
disclosed
For each class of assets and liabilities not measured at fair value in the statement of financial position but for which
the fair value is disclosed, an entity should disclose the level within the fair value hierarchy within which the fair value
measurement would be categorised, and a description of the valuation technique and the inputs used in the
technique [IFRS13p97].
The example the IASB used for this requirement is the case in which a financial instrument that is measured at
amortised cost in the statement of financial position is required to disclose its fair value per IFRS 7. However IFRS
7p29(a) states that disclosures of fair value are not required when the carrying amount is a reasonable approximation
of fair value, for example, for financial instruments such as short-term trade receivables and payables. As such, the
disclosure requirements of IFRS13p97 are not mandatory when the assets and liabilities are exempt from fair value
disclosure per IFRS 7p29(a). The entity should disclose the fact that these current receivables and payables are
carried at values that reflect a reasonable approximation of their fair value.
4. Critical accounting estimates and judgements

1p122, 125 4.1 Critical accounting estimates and assumptions
Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities are outlined below.
(a) Fair value of derivative financial instruments
The Fund may, from time to time, hold financial instruments that are not quoted in active markets, such as over-the-
counter derivatives. Fair values of such instruments are determined by using valuation techniques. Where valuation
techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed by
experienced personnel at ABC Fund Services Limited, independent of the party that created them. Models are
calibrated by back-testing to actual transactions to ensure that outputs are reliable.
(b) Fair value of securities not quoted in an active market
The fair value of such securities not quoted in an active market may be determined by the Fund using reputable
pricing sources (such as pricing agencies) or indicative prices from bond/debt market makers. Broker quotes as
obtained from the pricing sources may be indicative and not executable or binding. The Fund would exercise
judgement and estimates on the quantity and quality of pricing sources used. Where no market data is available, the
Fund may value positions using its own models, which are usually based on valuation methods and techniques
generally recognised as standard within the industry. The inputs into these models are primarily earning multiples and
discounted cash flows. The models used to determine fair values are validated and periodically reviewed by
experienced personnel at ABC Fund Services Limited, independent of the party that created them. The models used
for private equity securities are based mainly on earnings multiples (based on the historical earnings of the issuer over
the past decade), adjusted for lack of marketability and control premiums. The models used for debt securities are
based on net present value of estimated future cash flows, adjusted as appropriate for liquidity, and credit and market
risk factors.
Models use observable data, to the extent practicable. However, areas such as credit risk (both own and
counterparty), volatilities and correlations require management to make estimates. Changes in assumptions about
these factors could affect the reported fair value of financial instruments. The sensitivity to unobservable inputs is
based on management’s expectation of reasonable possible shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes ‘observable’ requires significant judgement by the Fund. The Fund considers
observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively involved in the relevant market.
4.2 Critical judgements
Functional currency
The Board of Directors considers the euro the currency that most faithfully represents the economic effect of the
underlying transactions, events and conditions. The euro is the currency in which the Fund measures its performance
and reports its results, as well as the currency in which it receives subscriptions from its investors. This determination
also considers the competitive environment in which the Fund is compared to other European investment products.

Commentary – Significant accounting judgements in determining business model
The objective of ABC Fund is to achieve long-term capital appreciation and its portfolio is managed on a fair value
basis. ABC Fund therefore applies the business model allowed by IFRS 9pB4.1.6 which requires its portfolio to be
classified at fair value through profit or loss.
Determining the appropriate business model and assessing whether cash flows generated by an asset constitute
solely payments of principal and interest (SPPI) is sometimes complex and may require significant judgement.
Depending on the level of judgement and the amount of financial assets affected by the conclusion, the SPPI and/or
business model assessment may require disclosure as a significant judgement in accordance with IAS 1 p122.
5. Interest income and interest from financial assets at fair value through profit or loss
2019 2018
IFRS7p20(b) Interest income from cash and cash equivalents 167 74
DV Interest from debt securities at fair value through profit or loss 780 475
Total 947 549
6. Financial assets at fair value through profit or loss

2019 2018
IFRS7p8(a) Financial assets at fair value through profit or loss:
– Equity securities 99,746 76,656
– Derivatives 1,600 1,300
– Treasury bills 2,000 1,000
– Debt securities 18,382 14,286
Total financial assets at fair value through profit or loss 121,728 93,242
Other net changes in fair value on financial assets at fair value through profit or loss:
DV – Realised 3,834 (689)
– Change in unrealised 8,884 (878)
Total gains/(losses) 12,718 (1,567)
IFRS7p7, 34,
1p77, 112(c) 2019 2018
% of net % of net
Fair value assets Fair value assets
Debt securities
Eurozone sovereign 16,000 14.0% 13,700 16.2%
Eurozone corporate 1,600 1.4% – –
United States corporate 782 0.7% 586 0.7%
US treasury bills 2,000 1.7% 1,000 1.2%
Total debt securities 20,382 17.8% 15,286 18.1%
Equity securities
Eurozone 11,774 10.3% 7,014 8.3%
United States 87,972 76.9% 69,642 82.2%
Total equity securities 99,746 87.2% 76,656 90.5%
Derivatives
S&P futures1 700 0.6% 600 0.7%
S&P options 845 0.7% 700 0.8%
Interest rate futures 55 0.0% – –
Total derivatives 1,600 1.3% 1,300 1.5%
Total financial assets at fair value through profit or loss 121,728 106.3% 93,242 110.1%
Debt and equity securities are grouped based on their primary market in which the issuer operates.
1
In certain markets futures trading may be structured in a way that requires daily settlement and thus may result in a nil fair value at the end of each day. ABC
Fund does not have such an arrangement. Instead, the daily margin movements are considered to be collateral rather than settlement transactions.

IFRS7p14 The Fund has provided Custodian plc with a general lien over all assets (excluding cash1) held in custody. Custodian
plc has the right to sell or re-pledge up to 125% (2018: nil) of the collateral received to the extent of listed equity
securities sold short and the fair value of derivatives in a loss position. At 31 December 2019, this amounted to
e15,268 (2018: nil). This amount has been presented separately from the remaining financial assets at fair value
through profit and loss in the statement of financial position.
IFRS7p15 The Fund has not sold or re-pledged any collateral during the period.
The terms and conditions associated with collateral have no significant unusual requirements from the usual practice
of recourse when a default occurs.
Commentary – Centrally cleared derivative instruments
In some instances, when variation margin is posted on centrally cleared derivatives, the payment (or receipt) of
variation margin is legally characterized as collateral. The cash is payment of collateral, which might have to be
repaid, depending on future changes in the value of the trade being collateralised, and should be separately
recognised as a collateral asset / liability. The illustrative disclosures for ABC Fund follow this scenario.
In certain circumstances daily variation margin posted would be legally characterized as a partial settlement payment
as opposed to collateral. However, the partial settlement payment will not terminate the derivative agreement as the
contract will continue to exist with the terms governing future payments (for example the notional, fixed, and floating
terms of an interest rate swap) remaining unchanged.
In order for the transaction to be considered a partial settlement, as opposed to collateral, and the cash payment to
achieve partial derecognition of the original trade, the derecognition requirements of IFRS 9 must be met. This will
generally be because, under the terms of the relevant contract(s), the cash payment causes:
i. for an asset, the contractual rights to cash flows of the original contract to expire (as they are satisfied in full by
the receipt of cash) in accordance with IFRS 9.3.2.3(a); or
ii. for a liability, the contractual obligations under the original contract to be discharged in accordance with IFRS
9.3.3.1.
Some Central Clearing Counterparties, including the London Clearing House (LCH) and Chicago Mercantile
Exchange (CME), have implemented rule amendments to the nature of variation margin so that it is considered a
partial settlement payment, as opposed to the posting of collateral. Care should therefore be taken to ensure that the
accounting reflects the most up to date terms and conditions, including any recent changes.
7. Financial liabilities at fair value through profit or loss

2019 2018
Financial liabilities:
IFRS7p6, 8(e) – Listed equity securities sold short 10,548 9,200
IFRS9pBA.7 – Derivatives 1,115 538
Total financial liabilities at fair value through profit or loss 11,663 9,738
IFRS7p20(a)(i) Other net changes in fair value on financial liabilities at fair value through profit or loss:
– Realised (500) (622)
– Change in unrealised 1,237 (29)
Total net gains/(losses) 737 (651)
IFRS7p7, 34,
1p77, 112(c) 2019 2018
% of net % of net
Fair value assets Fair value assets
Short sales of equity securities
United States 10,548 9.2% 9,200 10.9%
Total short sales of equity securities 10,548 9.2% 9,200 10.9%
Derivatives
S&P futures 410 0.4% 220 0.3%
S&P options 705 0.6% 318 0.4%
Total derivatives 1,115 1.0% 538 0.7%
Total financial liabilities at fair value through profit or loss 11,663 10.2% 9,738 11.6%
1
If cash collateral was provided on specific transactions, the Fund would be required to separately identify the collateral as ‘margin cash’ or a ‘receivable’ and
not include the amount as part of ‘cash and cash equivalents’ [IFRS9 IE D.1.1].

8. Financial instruments by category

IFRS7p6,8 Financial
Financial assets at fair
assets at value through
31 December 2019 amortised cost profit or loss Total
Assets as per statement of financial position
Financial assets at fair value through profit or loss – 106,460 106,460
Financial assets at fair value through profit or loss pledged as
collateral – 15,268 15,268
Due from brokers 2,356 – 2,356
Other receivables 497 – 497
Margin accounts 1,026 – 1,026
Cash and cash equivalents 1,620 – 1,620
Total 5,499 121,728 127,227
Financial
Financial assets at fair
assets at value through
31 December 2018 amortised cost profit or loss Total
Assets as per statement of financial position
Financial assets at fair value through profit or loss – 93,242 93,242
Due from brokers 984 – 984
Other receivables 448 – 448
Margin accounts 223 – 223
Cash and cash equivalents 325 – 325
Total 1,980 93,242 95,222
Financial
liabilities at
fair value Financial
through profit liabilities at
or loss amortised cost Total
31 December 2019
Liabilities as per statement of financial position
Financial liabilities at fair value through profit or loss 11,663 – 11,663
Due to broker – 893 893
Accrued expenses – 257 257
Net assets attributable to holders of redeemable shares1 – 114,414 114,414
Total 11,663 115,564 127,227
Financial
liabilities at
fair value Financial
through profit liabilities at
or loss amortised cost Total
31 December 2018
Liabilities as per statement of financial position
Financial liabilities at fair value through profit or loss 9,738 – 9,738
Due to broker – 665 665
Accrued expenses – 145 145
Net assets attributable to holders of redeemable shares – 84,674 84,674
Total 9,738 85,484 95,222
9. Derivative financial instruments
The Fund holds the following derivative instruments:
(a) Futures
IFRS7p31 Futures are contractual obligations to buy or sell financial instruments on a future date at a specified price established
in an organised market. The futures contracts are collateralised by cash or marketable securities. Interest rate futures
are contractual obligations to receive or pay a net amount based on changes in interest rates at a future date at a
specified price, established in an organised financial market.
1
The Fund carries its redeemable shares at amortised cost. The option is available for a Fund to designate their redeemable shares as fair value through
profit and loss which would lead to a different categorisation in the table above. If this option is taken by a fund then other requirements applicable to fair
valued instruments will apply to its redeemable shares as required by IFRS13.

(b) Options
IFRS7p31 An option is a contractual arrangement under which the seller (writer) grants the purchaser (holder) the right, but not
the obligation, either to buy (a call option) or sell (a put option) at or by a set date or during a set period, a specific
amount of securities or a financial instrument at a predetermined price. The seller receives a premium from the
purchaser in consideration for the assumption of future securities price. Options held by the Fund are exchange-
traded. The Fund is exposed to credit risk on purchased options only to the extent of their carrying amount, which is
their fair value.
The contract amounts of certain types of financial instrument, as disclosed in note 3.1.1, provide a basis for
comparison with instruments recognised on the statement of financial position, but they do not necessarily indicate
the amounts of future cash flows involved or the current fair value of the instruments. The derivative instruments
become favourable (assets) or unfavourable (liabilities) as a result of fluctuations in market interest rates or foreign
exchange rates relative to their terms. The aggregate contractual or notional amount of derivative financial instruments
on hand, the extent to which instruments are favourable or unfavourable, and thus the aggregate fair values of
derivative financial assets and liabilities can fluctuate significantly from time to time.
10. Margin accounts
1p112(c) Margin accounts represent margin deposits held in respect of open exchange-traded futures contracts.
11. Cash and cash equivalents

7p45 For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances with original
maturity of less than 90 days:
2019 2018
Cash at bank 620 325
Short-term deposits 1,000 –
Total 1,620 325
12. Redeemable shares
1p79, 80 The Fund’s authorised redeemable share capital is 5,000,000 shares with par value of e0.1 per share. These are
1p134, 135 issued as Class A or Class B shares, both of which carry equal voting rights, are entitled to dividends and are entitled
to a proportionate share of the Fund’s net assets attributable to holders of redeemable shares. Class B shares are not
subject to management fees. All issued redeemable shares are fully paid. The Fund’s redeemable shares are subject
to a minimum holding and subscription amount. The Fund also has the ability to limit weekly cash redemptions and
withhold 25% of the requested amount for a period of no more than one month. Under extraordinary circumstances,
the Fund also has the ability to suspend redemptions if this is deemed to be in the best interest of all shareholders.
The relevant movements are shown on the statement of changes in net assets attributable to holders of redeemable
shares. In accordance with the objectives outlined in Note 1 and the risk management policies in Note 3, the Fund
endeavours to invest the subscriptions received in appropriate investments while maintaining sufficient liquidity to
meet redemptions, such liquidity being augmented by short-term borrowings or disposal of listed securities where
necessary.
DV The Fund’s net asset value per share is e12,465.84 (2018: e10,764.01) for a Class A share and e13,090.84 (2018:
e11,195.14) for a Class B share, at the statement of financial position date.
During the year ended 31 December, the number of shares issued, redeemed and outstanding were as follows:
2019 2018
Class A Class B Total Class A Class B Total
At 1 January 7,856 10 7,866 6,878 10 6,888
Redeemable shares issued 2,315 20 2,335 1,183 – 1,183
Redeemable shares redeemed (1,018) (6) (1,024) (205) – (205)
At 31 December 9,153 24 9,177 7,856 10 7,866
13. Distribution payable
32p35, 40 The dividends paid in 2019 and 2018 amounted to e2,000 (e254.26 per share) and e1,000 (e145.18 per share)
respectively and are presented as finance cost. A dividend for the year ended 31 December 2019 of e2,500 (e272.42
per share) will be proposed at the Annual General Meeting on 30 April 2020. These financial statements do not reflect
this dividend payable.

14. Related-party transactions

24p9 Parties are considered to be related if one party has the ability to control the other party or exercise significant
24p18 influence over the other party in making financial or operational decisions.
(a) Management fee
The Fund is managed by XYZ Capital Limited (the ‘Investment Manager’), an investment management company
incorporated in Lagartos. Under the terms of the management agreement dated 15 May 2001, the Fund appointed
XYZ Capital Limited as an Investment Manager to provide management services to the Fund. XYZ Capital Limited
receives in return a fee based on the net asset value of Class A shares estimated based on traded values, payable
quarterly in advance using the annual rate of 0.8%. Total management fees for the year amounted to e803 (2018:
e684), with e67 (2018: e57) in outstanding accrued fees due to XYZ Capital Management Limited at the end of the
year.
24p18 (b) Custodian fee
The Fund has engaged the services of XYZ Custody Bank Limited, a fellow subsidiary company of the Investment
Manager, to provide custodian services for a fee. The fees are charged on a scale of 0.075% per annum on the first
e50,000 of the Fund, and 0.04% thereafter on the net asset value of the Fund, estimated based on traded values. Total
custodian fees, for the year amounted to e40 (2018: e34), with e4 (2018: e3) in outstanding accrued fees due to XYZ
Custody Bank at the end of the year.
24p18 (c) Secretarial and administration fee
The Fund has engaged the services of ABC Fund Services Limited, a fellow subsidiary company of the Investment
Manager, to provide secretarial and administrative services for a fee. The fees are charged on a scale of 0.02% per
annum on the net asset value of the Fund, estimated based on traded values.
Total fees for secretarial and administrative services for the year amounted to e16 (2018: e13), with e6 (2018: e5) in
outstanding of accrued fees due to ABC Fund Services Limited at the end of the year.
(d) Board of Directors’ remuneration
The total remuneration paid to directors in 2019 was e30 (2018: e25) and consisted of only fixed directors’ fees.
(e) Related party share holdings
The Directors of the Fund held all the Class B redeemable shares in the Fund (2018: 100%) as detailed below.
For the year ended 31 December 2019:
24p18, 24p19(f) Number of Number of Number of

shares at shares shares Number of
the start of acquired in redeemed in shares at
Shareholder year the year the year year end
Directors 10 20 6 24
Number of Number of Number of

shares at shares shares Number of
the start of acquired in redeemed in shares at
Shareholder the year the year the year year end
Directors 10 – – 10

Independent auditor’s report

To the shareholders of ABC Fund
The audit report will be provided by the entity’s auditor upon completion of the audit of the financial statements. As the wording of
the report is likely to differ from country to country, we have not included an illustrative report in this publication.
Independent auditor’s report
Form and content of audit report
ISA700 Standards and guidance on the preparation of reports on audits conducted in accordance with international auditing
standards are given in International Standard on Auditing ISA 700 Forming an Opinion and Reporting on Financial
Statements.

Appendix I – Statement of cash flows – direct method
Appendix I – Statement of cash flows – direct method
The financial statements of ABC Fund present the cash flows from operations using the indirect method. The statement below
shows the cash flows from operations using the direct method. Both methods are permitted under IAS 7, ‘‘Statement of Cash
Flows’’.

1p113 Note 2019 2018
7p10, 18(a), 21 Cash flows from operating activities
7p15 Purchase of financial assets and settlement of financial liabilities (36,218) (15,175)
7p15 Proceeds from sale of financial assets 20,622 5,058
7p15 Purchase and settlement of derivative financial instruments (1,840) (1,000)
7p15 Proceeds from derivative financial instruments 2,025 1,167
7p31 Dividends received 1,412 664
7p31 Interest received 917 482
Operating expenses paid (971) (782)
Net cash used in operating activities (14,053) (9,586)
7p10, 21 Cash flows from financing activities
7p17 Distributions paid to holders of redeemable shares 13 (2,000) (1,000)
7p17 Proceeds from redeemable shares 26,991 12,901
7p17 Redemptions of redeemable shares (9,670) (2,165)
Net cash from financing activities 15,321 9,736
Net increase in cash and cash equivalents 1,268 150
Cash and cash equivalents at beginning of the year 11 325 182
7p28 Exchange gains/(losses) on cash and cash equivalents 27 (7)
Cash and cash equivalents at end of the year 11 1,620 325

Appendix II – Funds whose shares are equity
The illustrative financial statements are based on an open-ended fund that issues puttable instruments, which are classified as
financial liabilities under IAS 32, ‘Financial instruments: Presentation’. The below includes example disclosures for a closed ended
fund whose shares or units are equity under IAS 32, ‘Financial instruments: Presentation’.
1p54, 60, 113 Note As at 31 December

2019 2018
Assets
1p66 Current assets
1p54(d),
IFRS7p8(a) Financial assets at fair value through profit or loss 6, 9 106,460 93,242
1p54(h),
Equity
1p54(r) Capital and reserves attributable to equity holders of the Fund
1p78(e) Share capital 9,177 7,866
1p78(e) Share premium1 81,410 65,400
1p78(e) Retained earnings 23,827 11,408
Total equity 114,414 84,674
Liabilities
1p54(m),
IFRS7p8(e) Financial liabilities at fair value through profit or loss 7, 9 11,663 9,738
IFRS7p8 Due to brokers 893 665
1p54(k) Accrued expenses 257 145
Total liabilities 12,813 10,548
Total equity and liabilities 127,227 95,222
1
A fund may choose to present the split between share capital and share premium in the notes rather than in the primary statements. In circumstances where
there is no share premium, presentation of this split would not be required.

Statement of comprehensive income1
1p82, 81B,
85,102 Note Year ended 31 December
2019 2018
1p82(a) Income
1p85 Interest income 5 167 74
Interest from financial assets at fair value through profit or loss 780 475
1p85 Net foreign currency gains or losses on cash and cash equivalents 27 (7)
IFRS7p20(a)(i), Other net changes in fair value on financial assets and liabilities at fair value 6, 7
1p35 through profit or loss 13,455 (2,218)
Total net income 15,967 (621)
1p85, 99 Expenses
Custodian fee, secretarial and administration fees 14 (56) (47)
Director’s fees 14 (30) (25)
1p85 Profit/(loss) before tax 14,601 (1,637)
1p81A Profit/(loss) for the year 14,419 (1,775)
1p82A Other comprehensive income2 – –
1p81A Total comprehensive income/(loss) 14,419 (1,775)
33p66 Earnings/(loss) per share – basic and diluted
(e per share)3 1,692.37 (246.53)
Statement of changes in equity
Share Share Retained

1p106 capital premium earnings Total
At 1 January 2018 6,888 55,642 14,183 76,713

1p106(a) Total comprehensive income/(loss) for the year – – (1,775) (1,775)
1p107 Dividend – – (1,000) (1,000)
1p106(d) Issue of shares 1,183 11,718 – 12,901
1p106(d) Repurchase of own shares (205) (1,960) – (2,165)
At 31 December 2018 7,866 65,400 11,408 84,674
1p106(a) Total comprehensive income for the year – – 14,419 14,419

1p107 Dividend – – (2,000) (2,000)
1p106(d) Issue of shares 2,335 24,656 – 26,991
1p106(d) Repurchase of own shares (1,024) (8,646) – (9,670)
At 31 December 2019 9,177 81,410 23,827 114,414
1
IAS 1 (revised), ‘Presentation of financial statements’, allows a choice of presenting all items of income and expense recognised in a period either (a) in a
single statement of comprehensive income or (b) in two statements comprising (i) a separate income statement, which displays components of profit or loss,
and (ii) a statement of comprehensive income, which begins with profit or loss and displays components of other comprehensive income. The Fund has
elected to use the single statement approach.
2
The Fund has no components of ‘other comprehensive income’; an additional line item has been included for illustrative purposes.
3
IAS 33, ‘Earnings per share’, is applicable where the Fund’s ordinary shares are traded in a public market or when the financial statements are filed with a
regulatory organisation for the purpose of issuing ordinary shares in a public market.

Note – Accounting policies (extracts)
1p119 Share capital
32p37 Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction from the proceeds, net of tax. Incremental costs directly attributable to the issue of
new ordinary shares or options, or for the acquisition of a business, are included in the cost of acquisition as part of the
purchase consideration.
32p33 Where the Fund re-purchases its own ordinary shares (treasury shares), the consideration paid, including any directly
attributable incremental costs (net of income taxes), is deducted from equity attributable to the Fund’s equity holders
until the ordinary shares are cancelled, re-issued or disposed of. Where such shares are subsequently sold or
reissued, any consideration received, net of any directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the Fund’s equity holders.
1p119 Dividend distribution
10p12 Dividend distribution to the Fund’s shareholders is recognised as a liability in the Fund’s financial statements in the
period in which the dividends are approved by the Fund’s shareholders.
Note – Share capital
1p79, 80 2019 2018

Authorised share capital
10,000 ordinary shares with a par value of e1,000 per share 10,000 10,000
Ordinary shares-issued and fully paid 9,177 7,866
Each issued and fully paid ordinary share is entitled to dividends when declared and carries one voting right.
The Fund’s capital is represented by ordinary shares that have a e1,000 par value and carry one vote each. They are
entitled to dividends when declared. The Fund has no restrictions or specific capital requirements on the issue and re-
purchase of ordinary shares. The relevant movements on capital are shown on the statement of changes in equity.
Note – Earnings per share
Basic earnings per share is calculated by dividing the profit/(loss) for the year by the weighted average number of
ordinary shares in issue during the year, excluding the average number of ordinary shares purchased by the Fund and
held as treasury shares.
2019 2018
33p70(a) Profit/(loss) for the year (e000’s) 14,419 (1,775)
33p70(b) Weighted average number of ordinary shares in issue 8,520 7,200
Basic earnings/(loss) per share – basic and diluted
(e per share) 1,692.37 (246.53)
The Fund has not issued any shares or other instruments that are considered to have dilutive potential.
Note – Dividend payable
10p12 The dividend paid in 2019 and 2018 amounted to e2,000 (e254.26 per share) and e1,000 (e145.18 per share)
respectively. A dividend for the year ended 31 December 2019 of e2,500 (e272.42 per share) will be proposed at the
Annual General Meeting on 30 April 2020. These financial statements do not reflect this dividend payable.

Appendix III – Funds with puttable instruments reclassified from liabilities to equity
The illustrative financial statements are based on an open-ended fund which issues puttable instruments, which are classified as
financial liabilities under IAS 32, ‘Financial instruments: Presentation’.
The below includes example disclosures where the Fund is required to reclassify its puttable shares from liabilities to equity in
accordance with IAS 32.
In the prior year the Fund had two share classes in issue (Class A and Class B shares). Both classes in 2018 were classified as
‘financial liabilities’, given that there was no subordination and that they did not have identical rights. On 1 January 2019, Class B
was fully redeemed, leaving only Class A shares remaining in the Fund. Class A shares entitle the holder to a pro rata share of the
entity’s net assets at liquidation. No other financial instruments are in issue that have total cash flows based substantially on the
profit or loss, the changes in the recognised net assets or the changes in the fair value of the recognised and unrecognised net
assets of the Fund. The Class A shares have no other contractual obligation than the obligation to redeem the puttable instrument.
Note As at 31 December
1p54, 60, 113 2019 2018
Assets
1p66 Current assets
1p54(d),
IFRS7p8 Financial assets at fair value through profit or loss 6, 9 106,460 93,242
1p54(h),
Liabilities
1p54(m),
IFRS7p8(e) Financial liabilities at fair value through profit or loss 7, 9 11,663 9,738
IFRS7p8 Due to brokers 893 665
1p54(k) Accrued expenses 257 145
Total liabilities (2018: excluding net assets attributable to holders of redeemable
shares)* 12,813 10,548
1p54(r) Net assets attributable to holders of redeemable shares* 12 114,414 84,674
* Net assets attributable to holders of redeemable shares are classified as equity as at 31 December 2019 and as financial liabilities as
at 31 December 2018.

Statement of comprehensive income

1p82, 81B, 85, Note 2019 2018
102, 113
1p82(a) Income
1p85 Interest income 5 167 74
Interest from financial assets at fair value through profit or loss 780 475
1p85 Net foreign currency gains or losses on cash and cash equivalents 27 (7)
IFRS7p20 Other net changes in fair value on financial assets and financial liabilities at fair
(a)(i)1p35 value through profit or loss 6, 7 13,455 (2,218)
1p85 Total net income/(loss) 15,967 (621)
1p85, 99 Expenses
Custodian, secretarial and administration fees 14 (56) (47)
Directors’ fees 14 (30) (25)
1p85 Operating profit/(loss) 14,601 (1,637)
1p82(b) Finance costs
1p85, 32p Distributions to holders of redeemable shares (2018)1 13 – (1,000)
35
Profit/(loss) before tax 14,601 (2,637)

32IE32, 1p85, Increase/(decrease) in net assets attributable to holders of redeemable
32p35, 1p81A shares2 14,419 (2,775)
Statement of changes in net assets attributable to holders of redeemable shares3
1p6, 106, 113

Note 2019 2018
Net assets attributable to holders of redeemable shares at 1 January* 84,674 76,713
Dividend paid to shareholders (2019) (2,000)4 –
Redemption of redeemable shares (9,670) (2,165)
Net increase 15,321 10,736
Increase/(decrease) in net assets attributable to holders of redeemable shares
from operations 14,419 (2,775)
Net assets attributable to holders of redeemable shares at 31 December* 12 114,414 84,674
* During the year ended 31 December 2018, net assets attributable to holders of redeemable shares are classified as a liability. During
the year ended 31 December 2019, net assets attributable to holders of redeemable shares are classified as equity.
Commentary – change to equity classification
The presentation used above seeks to minimise the variation from the presentation used when shares are classified
as liabilities. The further analysis of equity movement as required by 1p78(e) is presented in the notes (see share
capital note extract).
1
Under the liability treatment distributions are recognised as a finance cost in the statement of comprehensive income however, under equity treatment
distributions are recognised as dividends in the statement of changes in equity.
2
Use of this heading description is acceptable, as its literal meaning is applicable to both years.
3
Use of this heading description is acceptable, as its literal meaning is applicable to both years.
4
Under the liability treatment, distributions are recognised as a finance cost in the statement of comprehensive income; however, under equity treatment,
distributions are recognised as dividends in the statement of changes in equity.

Notes to the financial statements (extracts)
IFRS7p21 Redeemable shares

1p119
32p16A-D Prior to 1 January 2019 the fund classified its puttable instruments as liabilities in accordance with IAS 32
(Amendment), ‘Financial instruments: Presentation’. However, the amendment requires puttable financial instruments
that meet the definition of a financial liability to be classified as equity where certain strict criteria are met. Those criteria
include:
. the puttable instruments must entitle the holder to a pro-rata share of net assets;
. the puttable instruments must be the most subordinated class and class features must be identical;
. there must be no contractual obligations to deliver cash or another financial asset other than the obligation on the
issuer to repurchase; and
. the total expected cash flows from the puttable instrument over its life must be based substantially on the profit or
loss of the issuer.
These conditions were met when Class B became fully redeemed on 1 January 2019 and Class A became the sole
share class in the Fund.
As a result of the reclassification of redeemable shares from liabilities to equity, the Fund’s distributions are no longer
be classified as a finance cost in the statement of comprehensive income, but rather as a dividends paid in the
statement of changes in net assets attributable to holders of redeemable shares.
Should the terms or conditions of the redeemable shares change such that they do not comply with the strict criteria
contained in the amended IAS 32, the redeemable shares would be reclassified to a financial liability from the date the
instrument ceases to meet the criteria. The financial liability would be measured at the instrument’s fair value at
the date of reclassification. Any difference between the carrying value of the equity instrument and fair value of the
liability on the date of reclassification would be recognised in equity.
Redeemable shares can be put back to the Fund at any time for cash equal to a proportionate share of the Fund’s
trading net asset value calculated in accordance with the Fund’s regulations.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from
the proceeds, net of tax. Incremental costs directly attributable to the issue of new ordinary shares or options, or for
the acquisition of a business, are included in the cost of acquisition as part of the purchase consideration.
Where the Fund re-purchases its redeemable shares, the consideration paid, including any directly attributable
incremental costs (net of income taxes) is deducted from equity attributable to the Fund’s equity holders until the
ordinary shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any
consideration received, net of any directly attributable incremental transaction costs and the related income tax
effects, is included in equity attributable to the Fund’s equity holders.
Note – Share capital (extracts)
1p136A(a) As at 31 December 2019, the Fund had e114,414 (2018: e0) of puttable financial instruments classified as equity.
A breakdown of the Fund’s equity balance is disclosed in the table extract below:
1p78(e) Share Share Retained

capital premium earnings Total
At 31 December 2018 – – – –
Adjustment for classification of redeemable shares to equity 7,866 65,400 11,408 84,674
Total comprehensive income – – 14,419 14,419
Dividend – – (2,000) (2,000)
Issue of shares 2,335 24,656 – 26,991
Repurchase of own shares (1,024) (8,646) – (9,670)
At 31 December 2019 9,177 81,410 23,827 114,414

Commentary – IAS 32 equity versus liability classification
This appendix presents a scenario where a fund moves from the liability treatment to equity treatment of net assets
attributable to holders of redeemable shares. In this scenario, the Fund met the criteria prescribed in the IAS 32
amendment at the beginning of the reporting period.
However, if the change in treatment were the other way around (that is, equity to liability classification), the
illustrations presented in this appendix can easily be adapted to address that scenario as well.

Appendix IV – Funds that invest in other investment funds
Investment funds may hold investments in other investment funds. The additional disclosures that may be provided for funds
holding investments in other investment funds are illustrated in this appendix.
Note – Summary of accounting policies (extracts)
Financial assets and financial liabilities at fair value through profit or loss
IFRS13p91 Valuation of investments in other funds
The Fund’s investments in other funds (‘Investee Funds’) are subject to the terms and conditions of the respective
Investee Fund’s offering documentation. The investments in Investee Funds are valued based on the latest available
redemption price of such units for each Investee Fund, as determined by the Investee Funds’ administrators. The
Fund reviews the details of the reported information obtained from the Investee Funds and considers:
. the liquidity of the Investee Fund or its underlying investments;
. the value date of the net asset value (NAV) provided;
. any restrictions on redemptions; and
. the basis of accounting and, in instances where the basis of accounting is other than fair value, fair valuation
information provided by the Investee Fund’s advisors.
If necessary, the Fund makes adjustments to the NAV of various Investee Funds to obtain the best estimate of fair
value. Other net changes in fair value on financial assets and financial liabilities at fair value through profit or loss in the
statement of comprehensive income include the change in fair value of each Investee Fund.
Note – Financial risk (extracts)
Fair value estimation (risk note extracts)
IFRS13p91 As at 31 December 2019, 100% (2018: 100%) of financial assets at fair value through profit or loss comprise
investments in Investee Funds that have been fair valued in accordance with the policies set out above. The shares of
the Investee Funds are not publicly traded; redemption can only be made by the Fund on the redemption dates and
subject to the required notice periods specified in the offering documents of each of the Investee Funds. The rights of
the Fund to request redemption of its investments in Investee Funds may vary in frequency from weekly to annual
redemptions. As a result, the carrying values of the Investee Funds may not be indicative of the values ultimately
realised on redemption. In addition, the Fund may be materially affected by the actions of other investors who have
invested in the Investee Funds in which the Fund has invested.
All of the Investee Funds in the investment portfolio are managed by portfolio managers who are compensated by the
respective Investee Funds for their services. Such compensation generally consists of an asset-based fee and a
performance-based incentive fee. Such compensation is reflected in the valuation of the Fund’s investment in each of
the Investee Funds.
The Investee Funds are not traded on an active market; their fair value is determined using valuation techniques. The
value is primarily based on the latest available redemption price of the Investee Fund’s units as reported by the
administrator of such Investee Fund. The Fund may make adjustments to the value based on considerations such as;
liquidity of the Investee Fund or its underlying investments, the value date of the net asset value provided, any
restrictions on redemptions and the basis of accounting.
IFRS13p93(b) IFRS 13 requires the Fund to classify fair value measurements using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy has the following levels:
. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly; and
. Level 3 inputs are unobservable inputs for the asset or liability.
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined
on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this
purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value
measurement uses observable inputs that require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement
in its entirety requires judgement, considering factors specific to the asset or liability.

IFRS13p93(b) The following table analyses within the fair value hierarchy the Fund’s financial assets measured at fair value at
31 December 2019:
Assets Level 1 Level 2 Level 3 Total balance

– Fund of fund investments – 118,470 1,050 119,520
Total – 118,470 1,050 119,520
The following table analyses within the fair value hierarchy the Fund’s financial assets measured at fair value at 31
December 2018:
Assets Level 1 Level 2 Level 3 Total balance

– Fund of fund investments – 93.242 – 93,242
Total – 93,242 – 93,242
The Investee Funds held by the Fund are not quoted in active markets1.
The Investee Funds classified in Level 22 were fair valued using the net asset value of the Investee Fund, as reported
by the respective Investee Fund’s administrator. For these Investee Funds, management believes the Fund could
have redeemed its investment at the net asset value per share at the statement of financial position date.
Level 33 is comprised of a single Investee Fund, which was fair valued with reference to the net asset value as reported
by the Investee Fund’s administrator, adjusted to take into account the restrictions applicable to redemptions. Prior to
the statement of financial position date, the Investee Fund placed a suspension on its redemptions. Management of
the Investee Fund has communicated its intention to lift the suspension by January 2020.4
Note – Critical accounting estimates and judgements (extracts)
1p122 The Fund makes estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates
1p125 and judgments are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
Fair value of investments in other funds
The fair value of investments in Investee Funds that are not quoted in an active market is determined primarily by
reference to the latest available redemption price of such units for each Investee Fund, as determined by the
administrator of such Investee Fund. The Fund may make adjustments to the reported net asset value of various
Investee Funds based on considerations such as:
. the liquidity of the Investee Fund or its underlying investments;
. the value date of the net asset value provided;
. any restrictions on redemptions; and
. the basis of accounting and, in instances where the basis of accounting is other than fair value, fair valuation
information provided by the Investee Fund’s advisors.
The models used to determine fair values are validated and periodically reviewed by experienced personnel at ABC
Fund Services Limited, independent of the party that created them. The carrying values of the Investee Funds may be
materially different to the values ultimately realised on redemption.
Notes – Financial risk (extracts)
IFRS7p33 (i) Price risk (extracts)
The Fund invests in other funds and is susceptible to market price risk arising from uncertainties about future values of
those Investee Funds. The investment manager makes investment decisions after an extensive assessment of the
underlying fund, its strategy and the overall quality of the underlying fund’s manager. The Fund’s policy requires the
Investment Manager to complete a full reassessment of each of the Investee Funds on a quarterly basis and track the
performance of each Investee Fund on a weekly basis.
1
Funds quoted in an active market would be classified in Level 1 and would consist mostly of daily traded funds for which there is sufficient evidence of
transactions taking place on a regular basis and trading prices are readily available.
2
IFRS13p81 requires the valuation of Level 2 investments to be based on observable inputs. When considering the classification of an investment in an
Investee Fund, an observable input can be considered to be, among other things, the published net asset value of the Investee Fund where the net asset
value can be transacted upon on the measurement date.
3
Level 3 roll disclosure is required by IFRS 13; however, it is not presented in this appendix.
4
Refer to the main body of the Illustrative Financial Statements for disclosure requirements on valuation of level 3 investments.

The Fund’s investment restrictions prohibit it from investing more than 10% of its assets in any one Investee Fund.
At 31 December 2019, the exposure to investments in investee funds at fair value by strategy employed is disclosed in
the following table. These investments are included in financial assets at fair value through profit or loss in the
IFRS7p34 31 December
2019 2018
% of net assets % of net assets
attributable to attributable to
holders of holders of
redeemable redeemable
Fair value shares Fair value shares
Equity long/short 55,548 49.8 20,564 24.3
Event driven 41,531 37.2 20,568 24.3
Directional trading 9,668 8.7 17,656 20.9
Multi-strategy 5,752 5.2 2,567 3.0
Fund of funds 5,565 5.0 31,887 37.7
Relative value 1,456 1.3 – –
Total 119,520 107.2 93,242 110.2
IFRS7p33(b) The performance of investments held by the Fund is monitored by the Fund’s Investment Manager on a weekly basis
and reviewed by the Board of Directors on a quarterly basis.
IFRS7p34, 40 The table below summarises the impact on the Fund’s net assets attributable to holders of redeemable shares, of
reasonable possible changes in the returns of each of the strategies to which the Fund is exposed through the 37
funds in which it invests at year end (2018: 32 funds). A reasonably possible change is management’s assessment,
based on historical data sourced from the underlying Investee Funds, of what a reasonably possible percentage
movement is in the value of a fund following each respective strategy over a 12-month period, in euros. The impact on
net assets attributable to holders of redeemable shares is calculated by applying the reasonably possible movement
determined for each strategy to the value of each Investee Fund held by the Fund.
The analysis is based on the assumption that the returns on each strategy have increased or decreased, as disclosed,
with all other variables held constant. The underlying risk disclosures represent the market risks to which the
underlying funds are directly exposed. I, F, O represents interest rate, foreign currency and other price risks
respectively. For the purpose of determining the underlying risk disclosures, in accordance with IFRS 7, currency risk
is not considered to arise from financial instruments that are non-monetary items – for example, equity investments.
As at 31 December 2019
Impact on net
assets
Underlying Reasonable attributable to
risk Number of possible redeemable
Strategy Sub-strategy exposures Funds change (%) shareholders
Equity long/short:
Sector specialists O 6 0.2 1,115
Short bias O 5 3.0 1,157
Opportunistic O 1 6.7 155
Event driven:
Distressed securities I, F 4 7.5 2,113
Merger arbitrage O 4 5.6 1,040
Emerging markets I,F,O 2 9.5 169
Directional trading:
Global macro I,F,O 4 8.0 313
Market timing I,F,O 1 7.0 34
Commodity pools I,F,O 1 5.3 233
Multi-strategy: I,F,O 2 7.0 402
Fund of funds:
Fund of funds I,F,O 1 7.5 245
Multi-manager I,F,O 1 6.6 113
Relative value:
Convergence arbitrage I,F,O 2 6.7 19
Fixed income arbitrage I,F 1 8.0 37
Convertible arbitrage I,F,O 1 5.7 25
MBS strategy I,F 1 7.8 20
Total 37 7,190

As at 31 December 2018
Impact on net
assets
Underlying Reasonable attributable to
risk Number of possible redeemable
Strategy Sub-strategy exposures Funds change (%) shareholders
Equity long/short:
Sector specialists O 6 5.5 1,115
Short bias O 2 3.2 115
Event driven:
Distressed securities I, F 5 7.5 1,050
Merger arbitrage O 4 5.6 300
Emerging markets I,F,O 1 9.5 86
Directional trading:
Global macro I,F,O 2 9.2 513
Market timing I,F,O 3 6.8 505
Commodity pools I,F,O 1 5.3 502
Multi-strategy: I,F,O 1 7.0 125
Fund of funds:
Fund of funds I,F,O 6 7.5 1,997
Multi-manager I,F,O 1 6.6 103
Total 32 6,411
IFRS7p33 Note – Liquidity risk (extracts)
The Fund is exposed to monthly cash redemptions of redeemable shares and has a 30-day notice period for
redemption requests. It therefore invests the majority of its assets in Investee Funds from which the Fund can redeem
within one month or less; it invests only a limited proportion of its assets in Investee Funds with redemption restrictions
or redemption terms greater than one month. Certain Investee Funds acquired may also be subject to an initial lock-up
period that may range up to two years. No Investee Funds were subject to lock-up periods as at 31 December 2019 or
2018. At 31 December 2019, 90% of the Fund’s investments in other funds are subject to redemption restrictions
exercisable by the manager of the Investee Fund to manage extraordinary liquidity pressures (2018: 85%). These
include the ability to suspend redemptions or withhold varying amounts of any redemption requested. At 31
December 2019, one Investee Fund (2018: nil) has suspended redemptions and was valued at e1,050 (2018: nil).
IFRS7p39(a) The financial liabilities of the Fund at 31 December 2019 and 2018 comprise of accrued expenses and net assets
attributable to holders of redeemable shares. As at 31 December 2019, total accrued expenses of e1,150 (2018: e810)
had contractual maturity dates ranging between 1 and 7 days (2018: 1 and 7 days) after the year end date. As at 31
December 2019 net assets attributable to holders of redeemable shares of e123,869 (2018: e92,886) had contractual
maturity dates of 30 days after year end. As all liabilities as at 31 December 2019 and 2018 fall due within one month of
the year end, the effect of discounting has no material impact on the cash flows.
The Fund will generally retain sufficient cash and cash equivalent balances to satisfy its accrued expenses as they fall
due. In order to satisfy shareholder redemption requests, the Fund will redeem its investments in Investee Funds,
which allow redemptions within one month or less. However, the majority of Investee Funds have the ability to impose
discretionary redemption restrictions, which include the ability to suspend redemptions or withhold varying amounts
of any redemption requested in extraordinary situations. Additionally, a portion of the Investee Funds may have
redemption terms that are greater than one month or may also be subject to lock-up periods of up to two years.
IFRS7pB11E The following table shows the ordinary redemption periods of the Investee Funds held1:
Less than 7 7 days to 1

At 31 December 2019 days month 1-6 months Suspended
Funds with notice periods of less than 7 days 11,626 14,870 – –
Funds with notice periods of 7 and 30 days – 86,129 5,845 1,050*
Total 11,626 100,999 5,845 1,050
At 31 December 2018
Funds with notice periods of less than 7 days 2,939 5,238 – –
Funds with notice periods of 7 and 30 days – 69,780 15,285 –
Total 2,939 75,018 15,285 –
*This relates to XYZ Fund of Fund Limited. On 30 November 2019, the directors of XYZ Fund of Fund Limited suspended redemptions due to
the level of redemption requests received and the illiquidity of several material positions in its portfolio. The directors of XYZ Fund of Fund
Limited issued an advisory letter to shareholders on 18 December 2019, stating that they intend to lift the suspension by January 2020.
1
IFRS7pB11E states that an entity should disclose a maturity analysis of financial assets it holds for managing liquidity risk if that information is necessary to
enable users of its financial statements to evaluate the nature and extent of liquidity risk. It is acceptable to present this analysis in narrative format or in a
tabular format.

The Fund has entered into a short-term financing agreement with Bank plc, which will allow the Fund to borrow up to
50% of its net asset value for the purpose of paying redemptions. The borrowing facility is available to the Fund up to
December 2020 and bears interest at one-month USD LIBOR plus 50 basis points. It is the intention of the Fund to
utilise this facility only in instances where it is unable to liquidate an adequate portion of its investments in order to pay
redemptions as they fall due, or in cases where the liquidation of investments held would put the Fund in a
disadvantageous position. The Fund has not utilised this facility during 2019 and 2018.
The Fund also has the ability in extraordinary situations to impose discretionary redemption restrictions, which include
the ability to suspend redemptions or withhold varying amounts of any redemption requested. It is the intention of the
Fund to exercise this ability only in instances where the payment of redemptions would put the remaining
shareholders in a disadvantageous position, or if the Fund is unable to liquidate its investments or source acceptable
financing that would allow the Fund to pay redemptions as they fall due.
Commentary – IFRS 12, ‘Disclosure of interests in other entities’
When investee funds are considered to be ‘structured entities’ as defined in IFRS 12, there will be additional
disclosure requirements [IFRS12p24-31]. Refer to Appendix IX for the impact of IFRS 12 on funds that invest in other
investment funds which meet the definition of ‘‘structured entities’’.

Appendix V – Funds with significant leverage
Investment funds may have significant levels of leverage that are critical to the operations of the fund, which give rise to additional
risks for such funds. Examples of the additional disclosures that may be required for funds in these circumstances are illustrated
below.
1p119 Borrowings
IFRS7p21
Borrowings are recognised at fair value net of transaction costs incurred. They are subsequently valued at amortised
cost; any difference is recognised in the statement of comprehensive income over the period of the borrowing using
the effective interest method.
Collateral
IFRS9IGD1.1 Cash collateral provided by the Fund is identified in the statement of financial position as ‘margin cash’ and is not
IFRS9p3.2.23 included as a component of ‘cash and cash equivalents’. For collateral other than cash, if the party to whom the
collateral is provided has the right by contract or custom to sell or re-pledge the collateral, the Fund classifies that
asset in its statement of financial position separately from other assets and identifies the asset as pledged collateral.
Where the party to whom the collateral is provided does not have the right to sell or re-pledge, the collateral provided
is disclosed in the notes to the financial statements.
1p119 Sale and repurchase agreements

IFRS7p21
IFRS9pB3.2.16 Securities sold subject to repurchase agreements are reclassified in the financial statements as pledged assets when
the transferee has the right by contract or custom to sell or re-pledge the collateral. The counterparty liability is
included under ‘due under repurchase agreements’. Securities purchased under agreements to resell are recorded
separately under ‘due from agreements to resell’. The difference between the sale and the repurchase price is treated
as interest and accrued over the life of the agreement using the effective interest method.
Note – Borrowings (extracts)
7p50 The Fund has a margin borrowing facility for investment purposes up to 10 times its most recently calculated net asset
value attributable to holders of redeemable shares.
The margin borrowing facility matures in 2021 and bears interest at 1 week USD LIBOR plus 25 basis points.
IFRS7p14 The margin borrowings are secured by certain financial assets at fair value through profit or loss equal to e110,000
(2018: e90,000).
IFRS7p29 The carrying value of the borrowings approximates their fair value.
Note – Financial risk management (extracts)
Financial risk factors
IFRS7p31 The Fund may use various forms of leverage that increases the effect of any investment value changes on capital.
These include the use of margin borrowings, repurchase agreements and derivatives. While borrowing and leverage
present opportunities for increasing total return, they have the effect of potentially increasing losses as well.
If the gains on financial assets made with borrowed funds are less than the costs of the leverage or, under certain
circumstances, if the borrowing is terminated by the applicable lenders or counterparties in advance of its stated term,
the value of the Fund’s net assets attributable to holders of redeemable shares will decrease. Therefore, any event that
adversely affects the value of an investment by the Fund would be magnified to the extent leverage is employed. The
cumulative effect of the use of leverage in a market that moves adversely to a leveraged investment could result in a
substantial loss which would be greater than if leverage were not used.
3.1.1 Market risk (extracts)
(c) Cash flow and fair value interest rate risk
IFRS7p33(a) The Fund uses various forms of leverage that increase the Fund’s interest costs. There is no guarantee that existing
borrowing arrangements or other arrangements for obtaining leverage can be refinanced at rates as favourable to the
Fund as those rates available in the past.

3.1.2 Liquidity risk (extracts)
IFRS7p33(a), There is no guarantee that existing borrowing facilities or arrangements for obtaining leverage, will remain in place for
31 the life of the Fund. The Fund’s borrowing facilities are subject to a security interest in favour of the relevant creditors
and contain various financial and other covenants, including over-collateralisation tests, limitations on restricted
payments and limitations on indebtedness. Such over-collateralisation tests limit the amount that can be borrowed by
the Fund to a calculated percentage of the fair value of the pledged financial assets and other collateral. If there were a
decline in the fair value of the collateral pledged to the creditors under such facilities, the Fund might be required to
liquidate collateral assets in order to maintain compliance with the applicable financial covenants and might be
prevented from making any distributions.
Following an event of default under such facilities, the creditors could direct sales of the collateral assets. The prices
obtained in any such liquidation or foreclosure sales may not be sufficient to repay the Fund’s obligations under the
facilities, in which case the Fund would not have any remaining funds to distribute.
Further, most leveraged transactions require the posting of collateral. A decrease in fair value of such financial assets
may result in the lender, including derivative counterparties, requiring the Fund to post additional collateral or
otherwise sell assets at a time when it may not be in the Fund’s best interest to do so. A failure of the Fund to continue
to post the required collateral could result in a disposition of Fund’s assets at times and prices, which could be
disadvantageous to the Fund and could result in substantial losses having a material adverse effect on the Fund. To
the extent that a creditor has a claim on the Fund, such claim would be senior to the rights of the redeemable
participating shareholders.
Expiration or withdrawal of available financing for leverage positions, and the requirement to post collateral in respect
of changes in the fair value of leveraged exposures, can rapidly result in adverse effects to the Fund’s access to
liquidity and its ability to maintain leveraged positions, and may cause the Fund to incur material losses.
The borrowing facilities available to the Fund mature during 2021. As of 31 December 2019, the Fund has existing
available financing of e275 million (2018: e115 million) and is in the process of obtaining additional financing
arrangements. However, there is no guarantee the borrowing facility or other arrangements for obtaining leverage will
be available on the same terms and conditions acceptable to the Fund. In the event of not obtaining additional
financing, the Fund will be forced to liquidate positions to repay the outstanding borrowings.
Commentary – Disclosure initiative – Amendments to IAS 7
Amendments to IAS 7, effective for annual periods beginning on or after 1 January 2017, are also applicable to funds
with significant leverage. Entities are required to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and
non cash changes. To the extent necessary to satisfy this requirement, entities should disclose the following changes
in liabilities arising from financing activities:
(i) changes from financing cash flows;
(ii) changes arising from obtaining or losing control of subsidiaries or other businesses;
(iii) the effect of changes in foreign exchange rates;
(iv) changes in fair values; and
(v) other changes.
One way to fulfil the above disclosure requirements is by providing a reconciliation between the opening and closing
balances in the statement of financial position for liabilities arising from financing activities, including the changes
identified above.
Further illustrative guidance can be found in PwC’s ‘VALUE IFRS Plc: Illustrative IFRS consolidated financial
statements December 2019’ publication on inform.pwc.com.

Appendix VI – Segment reporting – multiple segments
If the Fund has debt or equity instruments that are traded in a public market or when the financial statements are filed with a
securities commission or other regulatory organisation for the purpose of issuing any class of instrument in a public market, IFRS 8,
‘Operating segments’, is applicable.
IFRS 8 requires a ‘management approach’, under which segment information is presented on the same basis as that used for
internal reporting purposes. This appendix includes segment information for a fund that is within the scope of IFRS 8 and has more
than one operating segment.
1p119 Segment reporting
IFRS8p5(b) Operating segments are reported in a manner consistent with the internal reporting used by the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the strategic asset allocation committee of the
investment manager that makes strategic decisions.
Note – Segment information
IFRS8p22(a) The strategic asset allocation committee of the investment manager makes the strategic resource allocations on
behalf of the fund. The Fund has determined the operating segments based on the reports reviewed by this committee
that are used to make strategic decisions.
IFRS8p22(a) The committee considers the business as two sub-portfolios, which are managed by separate specialist teams at the
Investment Manager. These sub-portfolios consist of an equity portfolio, which focuses on equity securities and
related derivatives; the second sub-portfolio consists of debt and cash instruments.
IFRS8p22(b) The reportable operating segments derive their income by seeking investments to achieve targeted returns
consummate with an acceptable level of risk within each portfolio. These returns consist of interest, dividends and
gains on the appreciation in the value of investments.
IFRS8p29 There were no changes in the reportable segments during the year.
The segment information provided to the strategic allocation committee for the reportable segments is as follows:
Commentary – Description of segments
Entities shall disclose factors used to identify its reportable segments, including the basis of organisation, and types
of products and services from which each reportable segment derives its revenues. They must also disclose the
judgments made by management in applying the aggregation criteria of the standard, including a description of the
aggregated segments and the economic indicators that have been assessed in determining that the aggregated
segments share similar economic characteristics [IFRS8p22(aa)]. This appendix does not include illustrative
guidance on aggregated segments as there are no aggregated segments in this example.
For the year ended 31 December 2019
IFRS8p23, 24 Equity sub-portfolio Debt sub-portfolio Total

Interest income – 167 167
Interest from financial assets at
fair value through profit or loss – 780 780
Dividend income 1,538 – 1,538
Capital gains 13,733 (251) 13,482
Transaction costs (196) (130) (326)
Withholding taxes (182) – (182)
Total net segment income 14,893 566 15,459
Total segment assets 101,867 22,507 124,374
Total segment liabilities 11,663 – 11,663
Total segment assets include:
Equity sub-portfolio Debt sub-portfolio Total

Financial assets at fair value
through profit or loss 100,841 20,887 121,728
Other 1,026 1,620 2,646

IFRS8p23, 24 Equity sub-portfolio Debt sub-portfolio Total

Interest income – 74 74
Interest from financial assets at
fair value through profit or loss – 475 475
Dividend income 1,055 – 1,055
Capital gains (2,760) 535 (2,225)
Transaction costs (96) (41) (137)
Withholding taxes (138) – (138)
Total net segment income (1,939) 1,043 (896)
Total segment assets 77,974 15,816 93,790
Total segment liabilities 9,738 – 9,738
Total segment assets include:
Equity sub-portfolio Debt sub-portfolio Total

Financial assets at fair value
through profit or loss 77,751 15,491 93,242
Other 223 325 548
IFRS8p23 There were no transactions between reportable segments.
IFRS8p27 The assessment of the performance of the operating segments is based on investments valued at last traded market
prices. The Fund’s administration and management fees are not considered to be segment expenses.
IFRS8p28(b) A reconciliation of total net segmental income to operating profit/(loss) is provided as follows.
2019 2018
Total net segment income 15,459 (896)
Withholding taxes 182 138
Other fees and expenses (1,040) (879)
Operating profit/(loss) 14,601 (1,637)
IFRS8p27 The amounts provided to the strategic allocation committee with respect to total assets are measured in a manner
consistent with IFRS. The Fund’s other receivables are not considered to be segment assets and are managed by the
administration function.
Reportable segments’ assets are reconciled to total assets as follows.
IFRS8p28 2019 2018

Segment assets for reportable segments 124,374 93,790
Other receivables 2,853 1,432
IFRS8p27 The amounts provided to the strategic allocation committee with respect to total liabilities are measured in a manner
consistent with IFRS. The Fund’s redeemable participating shares and payables for administration and management
fees are not considered to be segment liabilities and are managed by the administration function.
Reportable segments’ liabilities are reconciled to total liabilities as follows:
IFRS8p28 2019 2018

Segment liabilities for reportable segments 11,663 9,738
Net assets attributable to redeemable shareholders 114,414 84,674
Other payables 893 665
Total liabilities 127,227 95,222
IFRS8p33 The Fund is domiciled in Lagartos. All of the Fund’s income from investments is from entities incorporated in countries
other than Lagartos.
The Fund has no assets classified as non-current assets.
The breakdown of the major components of income and assets from other countries are disclosed below. All revenues
are derived from financial assets and are attributed to a country based on the domiciliation of the issuer of the
instrument.


United States Europe1 Total
Segmental net income 13,872 1,587 15,459
Financial assets at fair value through profit or loss 95,826 28,548 124,374

United States Europe Total
Segmental net income (886) (10) (896)
Financial assets at fair value through profit or loss 72,776 21,014 93,790
IFRS8p34 The Fund also has a highly diversified shareholder population, and no individual investor owns more than 1% of the
issued capital of the Fund.
1
If there were material balances included in this segment that related to an individual country, additional disclosures would be required to present segmental
information for those individual countries with material balances.

Appendix VII – Segment reporting – single segment
Appendix VII – Segment reporting – single segment
IFRS 8, ‘Operating segments’, is applicable if the Fund has debt or equity instruments that are traded in a public market or when the
financial statements are filed with a securities commission or other regulatory organisation for the purpose of issuing any class of
instrument in a public market. This appendix includes segment information for a fund that is within the scope of IFRS 8 but has only
one operating segment. The standard requires a ‘management approach’, under which segment information is presented on the
same basis as that used for internal reporting purposes.
This appendix is based on a Fund for which the internal reporting provided to the chief operating decision-maker (CODM) is
consistent with the measurement and recognition principles of IFRS.
In cases where the information provided to the CODM may differ from that contained in the Fund’s financial statements – for
instance, where investments are valued on a different basis or where certain income or expense items are excluded from the
internally reported profit or loss – the Fund will present the segment information consistent with what is reported internally to the
CODM; it will also present a reconciliation to the financial statement amounts. (See Appendix VI for examples of these types of
disclosure.)
In this instance, the Fund trades in a highly diversified portfolio of listed XYZ-Land equity, and the CODM’s asset allocation decisions
are made using a bottom-up approach based on a single, integrated investment strategy, with the Fund’s performance being
evaluated on an overall basis. These factors are the main reasons why the Fund qualifies as a single-segment entity.
It is possible for another fund that holds an identical portfolio to have multiple segments, depending on how the fund is managed
internally. For example, if another fund that also invests only in listed XYZ-Land equity is managed using a top-down approach, with
the CODM allocating a specific portion of total assets to a select group of industries, and with the performance of each industry
group being measured and managed separately, that fund may be seen as having multiple segments. IFRS8p5-10 lists the
considerations to be made when determining the different operating segments of an entity.
1p119 Segment reporting
IFRS8p5(b) Operating segments are reported in a manner consistent with the internal reporting used by the chief operating
decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the managing director (MD) of the investment manager
that makes strategic decisions.
Note – Segment information
IFRS8p22(a) The MD of the investment manager makes the strategic resource allocations on behalf of the fund. The Fund has
determined the operating segments based on the reports reviewed by the MD, which are used to make strategic
decisions.
IFRS8p22(a) The MD is responsible for the Fund’s entire portfolio and considers the business to have a single operating segment.
The MD’s asset allocation decisions are based on a single, integrated investment strategy, and the Fund’s
performance is evaluated on an overall basis.
IFRS8p22(b) The Fund trades in a highly diversified portfolio of listed XYZ-Land equity with the objective of generating significant
medium-term capital growth.
IFRS8p23 The internal reporting provided to the MD for the Fund’s assets, liabilities and performance is prepared on a consistent
IFRS8p24 basis with the measurement and recognition principles of IFRS.
IFRS8p29 There were no changes in the reportable segments during the year.
1
IFRS8p33 The Fund is domiciled in Lagartos. All of the Fund’s income is from investments in entities incorporated in XYZ-Land.
The Fund has no assets classified as non-current assets.
The Fund has a highly diversified portfolio of investments, and no single investment accounts for more than 6% of the
Fund’s income.
IFRS8p34 The Fund also has a diversified shareholder population. However, as at 31 December 2019, there were three
shareholders who each held more than 10% of the Fund’s net asset value. Their holdings were 11%, 13% and 19%
respectively. As at 31 December 2018, there were no shareholders who held greater than 10% of the Fund’s net asset
value.2
1
IFRS8p33(a) makes reference to ‘external customers’. Although this term bears no literal relevance to a fund, a fund will be required to present the
equivalent revenue disclosures required by this paragraph.
2
The IFRS8p34 reference to ‘external customers’ in this paragraph is taken to mean the investors for the purpose of a fund.

Appendix VIII – Investment funds with a tax uncertainty
In cases where a country’s tax regulations cause uncertainty, it is necessary to assess the extent of this uncertainty and the resulting
accounting impact. In all cases where material tax uncertainty exists, adequate disclosure should be included in the notes to the
financial statement to bring the users’ attention to the exposure, even if measured at nil.
Care should be taken when considering whether the exposure is direct or indirect. If the exposure is indirect – for example, via a
participating instrument established between the investor and an intermediary – the exposure may be more appropriately
considered as part of the fair valuation process when valuing the participating agreements, rather than as a potential income tax
liability. The relevant standards and recognition and measurement criteria may be different.
On 7 June 2017, the IFRS Interpretations Committee (IFRS IC) issued IFRIC 23 ‘Uncertainty over income tax treatments’ (‘‘IFRIC
23’’). IFRIC 23 clarifies how the recognition and measurement requirements of IAS 12 ‘Income taxes’, are applied where there is
uncertainty over income tax treatments.
IFRIC 23 addresses: –
(i) whether an entity considers uncertain tax treatments separately;
(ii) the assumptions an entity makes about the examination of tax treatments by taxation authorities;
(iii) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and
(iv) how an entity considers changes in fact and circumstances.
It is effective for annual periods beginning on or after 1 January 2019.
Measurement
Under IFRIC 23, if an entity concludes that it is probable that the tax authority will accept an uncertain tax treatment that has been
taken or is expected to be taken on a tax return, it should determine its accounting for income taxes consistently with that tax
treatment. If an entity concludes that it is not probable that the treatment will be accepted, it should reflect the effect of the
uncertainty in its income tax accounting in the period in which that determination is made (for example, by recognising an additional
tax liability or applying a higher tax rate).
The entity should then measure the impact of the uncertainty using the method that best predicts the resolution of the uncertainty
(that is, the entity should use either the most likely amount method or the expected value method when measuring an uncertainty).
The most likely amount method might be appropriate if the possible outcomes are binary or are concentrated on one value. The
expected value method might be appropriate if there is a range of possible outcomes that are neither binary nor concentrated on
one value. Some uncertainties affect both current and deferred taxes (for example, an uncertainty over the year in which an expense
is deductible). IFRIC 23 requires consistent judgements and estimates to be applied to current and deferred taxes.
Changes in circumstances
The judgements and estimates made to recognise and measure the effect of uncertain tax treatments are reassessed whenever
circumstances change or when there is new information that affects those judgements. New information might include actions by
the tax authority, evidence that the tax authority has taken a particular position in connection with a similar item, or the expiry of the
tax authority’s right to examine a particular tax treatment. IFRIC 23 states specifically that the absence of any comment from the tax
authority is unlikely to be, in isolation, a change in circumstances or new information that would lead to a change in estimate.
Disclosures
There are no new disclosure requirements in The Interpretation. However, entities are reminded of the need to disclose, in
accordance with IAS 1, the judgements and estimates made in determining the uncertain tax treatment.
Commentary – Observation
IFRIC 23 provides a framework to consider, recognise and measure the accounting impact of tax uncertainties. The
Interpretation provides specific guidance in several areas where previously IAS 12 was silent. For example, the
Interpretation specifies how to determine the unit of account and the recognition and measurement guidance to be
applied to that unit.
Most entities will have developed a model to account for tax uncertainties in the absence of specific guidance in
IAS 12. These models might, in some circumstances, be inconsistent with IFRIC 23 and the impact on tax accounting
could be material. Management should assess the existing models against the specific guidance in the Interpretation
and consider the impact on income tax accounting.

Interest and penalties on uncertain tax positions
An entity might receive or pay interest or penalties in relation to taxation (for example, where uncertain tax positions are resolved by
the tax authorities). IAS 12 does not specifically address the treatment of uncertain tax positions or associated interest and
penalties.
The IFRS Interpretations Committee (IC) issued an agenda decision in September 2017 on interest and penalties related to income
taxes.
The IC observed in the agenda decision that entities do not have an accounting policy choice between applying IAS 12 and
applying IAS 37, ‘Provisions, contingent liabilities and contingent assets’, to interest and penalties related to income taxes. If an
entity considers that a particular amount payable or receivable for interest and penalties is an income tax, IAS 12 is applied to that
amount. If an entity does not apply IAS 12 to an amount payable or receivable for interest and penalties, it applies IAS 37 to that
amount.
The IC also observed that i) an entity discloses its judgement in this respect applying paragraph 122 of IAS 1, ‘Presentation of
financial statements’, if it has a significant effect on the amounts recognised in the financial statements and ii) regardless of whether
an entity applies IAS 12 or IAS 37 when accounting for interest and penalties related to income taxes, the entity discloses
information about those items if material, because both IAS 12 and IAS 37 provide disclosure requirements.
Entities therefore need to decide whether a particular amount payable or receivable for interest and penalties is an income tax. IC
agenda decisions in March 2006 and May 2009 noted that IAS 12 defines income taxes as taxes that are based on taxable profits,
and the term ‘taxable profit’ implies a notion of a net rather than a gross amount. Amounts that are not based on taxable profits are
not income taxes. For example, interest and penalties might not be separated from income taxes where there is an overall
settlement with the tax authority and any interest and penalties cannot be identified separately.
Presentation and disclosures – Estimation uncertainty
An entity shall disclose information about the assumptions it makes about the future, and other major sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying
amounts of assets and liabilities within the next financial year. In respect of those assets and liabilities, the notes shall include details
of: (a) their nature, and (b) their carrying amount as at the end of the reporting period [MoA 14.178].
Below is an illustrative disclosure that may be appropriate in cases of direct exposure to tax uncertainties.
IAS12p46 Accounting policies – Tax and related interest and penalties (extracts)
In accordance with IAS 12, ‘Income taxes’, the Fund is required to recognise a tax liability when it is probable that the
tax laws of foreign countries require a tax liability to be assessed on the Fund’s capital gains sourced from such
foreign country, assuming the relevant taxing authorities have full knowledge of all the facts and circumstances. The
tax liability is then measured at the amount expected to be paid to the relevant taxation authorities, using the tax laws
and rates that have been enacted or substantively enacted by the end of the reporting period. There is sometimes
uncertainty about the way enacted tax law is applied to offshore investment funds. This creates uncertainty about
whether or not a tax liability will ultimately be paid by the Fund. Therefore, when measuring any uncertain tax liabilities,
management considers all of the relevant facts and circumstances available at the time that could influence the
likelihood of payment, including any formal or informal practices of the relevant tax authorities. If the Fund concludes
that it is not probable that its tax treatment will be accepted by the authorities, it reflects the effect of this uncertainty in
its income tax accounting in the period in which that determination is made. The Fund measures the impact of the
uncertainty using either the most likely amount method or the expected value method, whichever is the most
appropriate given the circumstances.
Critical judgements (extracts)
IAS1p122 The Fund considers interest and penalties on related tax liabilities to be an inseparable element of the tax liability and
accounts for interest and penalties as if they are within the scope of IAS 12. These amounts are included within the tax
line in the statement of comprehensive income, and the liability would be included within the income tax liability on the
Notes to the financial statements – Taxation
The Fund invests in securities issued by entities which are virtually all domiciled in countries other than Lagartos. Many
of these foreign countries have tax laws that indicate that capital gains taxes may be applicable to non residents, such
as the Fund. Typically, these capital gains taxes are required to be determined on a self assessment basis; therefore,
such taxes may not be deducted by the Fund’s broker on a ‘withholding’ basis.

At 31 December 2019 and 2018, the Fund has applied the most likely amount method in measuring uncertain tax
liabilities and related interest and penalties with respect to foreign capital gains taxes at nil: while this represents
management’s best estimate the estimated value could differ significantly1 from the amount ultimately payable. The
maximum exposure of the Fund as at 31 December 2019 was eXXX (2018: eXXX).2
[If the maximum exposure to a specific tax uncertainty was substantial management may wish to consider replacing the
2nd paragraph with the following wording]:
At December 31, 2019 and 2018, the Fund has applied the most likely amount method in measuring uncertain tax
liabilities and related interest and penalties with respect to foreign capital gains taxes at nil. While this represents
management best estimate there remains a risk that foreign tax authorities will attempt to collect taxes on capital gains
earned by the Fund. This could happen without giving any prior warning, possibly on a retrospective basis, and could
result in a substantial loss to the Fund. The maximum expected potential exposure of a loss to the Fund as at
31 December 2019 is eXXX (2018: eXXX).
Commentary – Observation
The Fund has applied the most likely amount method to measure the tax uncertainty as the possible outcomes were
binary in nature. If there were multiple possible outcomes then the expected value method may have been more
appropriate, in which case the Fund would not have been able to arrive a nil measurement.
1
If the exposure is not significant then the word ‘‘significantly’’ should be deleted and consideration given to including a statement explaining that the
potential impact is not expected to be significant.
2
The specific facts that support the non-accrual of uncertain tax liabilities should be disclosed here. These factors may include for example, the relevant tax
authority’s public communication or private communication with specific tax payers, a history of non-collection (due perhaps to an inability or unwillingness to
collect), or other specific precedents etc. The factors should not include detection risk or anticipation of changes in tax law.

Appendix IX – Impact of IFRS 12, ‘Disclosure of interests in other entities’
Appendix IX – Impact of IFRS 12, ‘Disclosure of interests in other entities’ on funds that invest in
other investment funds
This appendix provides illustrative disclosure required by IFRS 12 for a Fund that holds investments in underlying funds
which meet the definition of ‘‘unconsolidated structured entities’’ under IFRS 12. It is assumed that the Fund has no interests
in any other entities, as defined by IFRS 12, that require disclosure, including interests in subsidiaries, joint ventures and
associates.
The objective of IFRS 12, ‘Disclosures of interests in other entities’ is to require an entity to disclose information that enables users of
its financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those
interests on its financial position, financial performance and cash flows. Any entity that has an interest in subsidiaries, joint
arrangements, associates or unconsolidated structured entities will be caught in the scope of this standard. As such, funds that
invest in other funds may be caught in the scope of this standard if the investee funds are consolidated subsidiaries (whether
structured entities or not) or unconsolidated structured entities as defined in IFRS 12.
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who
controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by
means of contractual arrangements [IFRS12pB21].
A structured entity often has some or all of the following features or attributes:
(a) restricted activities.
(b) a narrow and well-defined objective, such as to effect a tax-efficient lease, carry out research and development activities,
provide a source of capital or funding to an entity or provide investment opportunities for investors by passing on risks and
rewards associated with the assets of the structured entity to investors.
(c) insufficient equity to permit the structured entity to finance its activities without subordinated financial support.
(d) financing in the form of multiple contractually linked instruments to investors that create concentrations of credit or other risks
(tranches) [IFRS12pB22].
Commentary – Significant judgements and assumptions
A reporting entity should consider whether its interest in another entity represents an interest in a structured entity. Significant
judgements and assumptions made should be disclosed. Funds are often constituted so that they either do not have voting
rights or where voting rights are only protective in nature. Many funds (including exchange traded funds) may, therefore, meet
the definition of a structured entity [IFRS12p2]. This appendix does not address this issue.
Illustrative Disclosure:
Notes – Summary of accounting policies (extracts)

IFRS12pB21 Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in
deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant
activities are directed by means of contractual arrangements. A structured entity often has some or all of the following
features or attributes; (a) restricted activities, (b) a narrow and well-defined objective, such as to provide investment
opportunities for investors by passing on risks and rewards associated with the assets of the structured entity to
investors, (c) insufficient equity to permit the structured entity to finance its activities without subordinated financial
support and (d) financing in the form of multiple contractually linked instruments to investors that create
concentrations of credit or other risks (tranches).
IFRS12p26 The Fund considers all of its investments in other funds (‘‘Investee Funds’’) to be investments in unconsolidated
structured entities. The Fund invests in Investee Funds whose objectives range from achieving medium to long term
capital growth and whose investment strategy does not include the use of leverage. The Investee Funds are managed
by unrelated asset managers and apply various investment strategies to accomplish their respective investment
objectives. The Investee Funds finance their operations by issuing redeemable shares which are puttable at the
holder’s option and entitles the holder to a proportional stake in the respective fund’s net assets. The Fund holds
redeemable shares in each of its Investee Funds.
IFRS12B26(c) The change in fair value of each Investee Fund is included in the statement of comprehensive income in ‘‘Other net
changes in fair value on financial assets and financial liabilities at fair value through profit or loss’’.
Commentary – Sponsored structured entities
For the purpose of this illustrative it is also assumed that the Fund has not sponsored any structured entities, if the Fund had
sponsored a structured entity the Fund would need to meet the additional disclosure requirements of IFRS12p27.

Appendix IX – Impact of IFRS 12, ‘Disclosure of interests in other entities’
Notes 4 Financial risk (extracts)
IFRS12p26 The Fund’s investments in Investee Funds are subject to the terms and conditions of the respective Investee Fund’s
offering documentation and are susceptible to market price risk arising from uncertainties about future values of those
Investee Funds. The investment manager makes investment decisions after extensive due diligence of the underlying
fund, its strategy and the overall quality of the underlying fund’s manager. All of the Investee Funds in the investment
portfolio are managed by portfolio managers who are compensated by the respective Investee Funds for their
services. Such compensation generally consists of an asset based fee and a performance based incentive fee and is
reflected in the valuation of the Fund’s investment in each of the Investee Funds.
IFRS12B26(e) The right of the Fund to request redemption of its investments in Investee Funds ranges in frequency from weekly to
semi annually.
IFRS12p29 The exposure to investments in Investee Funds at fair value by strategy employed is disclosed in the following table.
These investments are included in financial assets at fair value through profit or loss in the statement of financial
position1.
IFRS12p24, 26
& 29 31 Dec 20192
Net Asset Value of % of net assets
Investee Fund attributable to
(range and Investment holders of
Number of weighted avg) fair value redeemable
Strategy Investee Funds eMillion e 000’s shares
Equity long/short 12 25-60/(45) 55,548 49.8
Event driven 10 75-107/(82 41,531 37.2
Directional trading 6 100-225(175) 9,668 8.7
Multi-strategy 2 37-45/(41) 5,752 5.2
Fund of Funds 2 21-25/(23) 5,565 5
Relative value 5 25-100/(66) 1,456 1.3
119,520 107.2
Commentary – Disclosure
IFRS12p26 requires disclosure of qualitative and quantitative information about an entity’s interests in unconsolidated
structured entities, including, but not limited to, the nature, purpose, size and activities of the structured entity and how the
structured entity is financed.
IFRS12p29 The Fund’s maximum exposure to loss from its interests in Investee funds is equal to the total fair value of its
(c)&(d) investments in investee funds.
IFRS12p25 Once the Fund has disposed of its shares in an investee fund the Fund ceases to be exposed to any risk from that
investee fund.
IFRS12p30 The Fund’s investment strategy entails trading in other funds on a regular basis. Total purchases in investee funds
during the year ended 31 December 2019 was e35,345,000 (2018: e16,012,013). The Fund intends to continue
opportunistic trading in other funds. As at 31 December 2019 and 31 December 2018 there were no capital
commitment obligations and no amounts due to investee funds for unsettled purchases.
IFRS12B26(b) During the year ended 31 December 2019 total net losses incurred on investments in Investee Funds were
e17,381,000 (2018: e11,081,981).
Commentary – IFRS 7
The disclosure requirements of IFRS 7 and IFRS 12 may overlap to some extent. However, the intention is that both standards
complement each other [IFRS12BC72-BC74]. Therefore in situations where a fund invests in other funds, which fall within the
definition of a structured entity, additional disclosures requirements will result from the application of IFRS 12.
1
The line item in the statement of financial position in which the structured entities are included should be disclosed [IFRS12p29(b)]
2
Comparative information has not been included in the Illustrative disclosure above however it is required as the standard was effective since 1 January 2013.

Appendix X – Offsetting: Requirements and Disclosures under IAS 32 and IFRS 7
IFRS 7 requires disclosures to enable users of financial statements to evaluate the effect or the potential effects of netting
arrangements, including rights of set-off associated with an entity’s recognised financial assets and recognised financial
liabilities, on the entity’s financial position. IAS 32 provides guidance on offsetting criteria.
This appendix provides detailed guidance on the offsetting criteria contained in IAS 32 and disclosures required by IFRS 7.
Offsetting requirements under IAS 32
The guidance in paragraph 42 of IAS 32 states that a ‘‘financial asset and a financial liability shall be offset and the net amount
presented in the statement of financial position when, and only when, an entity:
(a) currently has a legally enforceable right to set-off the recognised amounts; and
(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.’’
IAS 32 stipulates that an entity currently has a ‘‘legally enforceable right to set-off’’ if the right to set-off is not contingent on a future
event and is enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy of the
entity and all of the counterparties [32pAG38B].
IAS 32 also states that gross settlement can be considered equivalent to net settlement if, and only if, the gross settlement
mechanism has features that eliminate or result in insignificant credit and liquidity risk, and that will process receivables and
payables in a single settlement process or cycle. AG38F of IAS32 lists several characteristics that a gross settlement system might
have that would allow it to meet this criterion. It is possible that systems utilised, for instance, by certain clearing houses may be
considered equivalent to a net settlement system.
Commentary – Offsetting requirements under IAS 32
The nature and extent of the right of set off, including any conditions attached to its exercise and whether it would remain in the
event of default or insolvency or bankruptcy, may vary from one legal jurisdiction to another. As such, the laws applicable to the
relationships between the parties need to be considered to ascertain whether the right to set off is enforceable in the manner
defined in the IAS 32 [32pAG38C & 38D].
It is also likely that legal analysis and judgement would be required in the determination of whether arrangements to which the
entity is subject meet the netting criteria under IAS 32.
Offsetting disclosures under IFRS 7
Scope:
Offsetting disclosures are required for all recognised financial instruments that are set-off in accordance with paragraph 42 of IAS 32
(see above). These disclosures also apply to recognised financial instruments that are subject to an enforceable master netting
arrangement or similar agreement that covers similar financial instruments and transactions, irrespective of whether they are set-off
in accordance with paragraph 42 of IAS 32 [IFRS7p13A,B40].
The similar agreements referred to above include derivative clearing agreements, global master repurchase agreements, global
master securities lending agreements, and any related rights to financial collateral. The similar financial instruments and
transactions referred to above include derivatives, sale and repurchase agreements, reverse sale and repurchase agreements,
securities borrowing, and securities lending agreements [IFRS7pB41].
Financial instruments that are subject only to a collateral agreement are not within the scope [IFRS7pB41].
IFRS 7 and IAS 32 do not provide a definition of ‘‘master netting arrangement’’ however IAS 32 provides the following list of
characteristics which a master netting arrangement would have:
– Such an agreement provides for a single net settlement of all financial instruments covered by the agreement in the event of
default on, or termination of, any one contract.
– These arrangements are commonly used by financial institutions to provide protection against loss in the event of bankruptcy
or other circumstances that result in a counterparty being unable to meet its obligations.
– A master netting arrangement commonly creates a right of set-off that becomes enforceable and affects the realisation or
settlement of individual financial assets and financial liabilities only following a specified event of default or in other
circumstances not expected to arise in the normal course of business [32p50].
Offsetting disclosure requirements:
The offsetting disclosure requirements contained in IFRS 7 apply to all recognised financial instruments that are subject to an
enforceable master netting arrangement or similar agreement, irrespective of whether they are set-off in accordance with
paragraph 42 of IAS 32 [IFRS7p13A].

The purpose of these disclosures is to enable users of the financial statements to evaluate the effect or potential effect of netting
arrangements on the entity’s financial position. This includes the effect or potential effect of rights of set-off associated with the
entity’s recognised financial assets and recognised financial liabilities that are subject to a master netting arrangement or similar
agreement [IFRS7p13B].
The disclosures require amounts to be presented in a tabular format separately for financial assets and financial liabilities, unless
another format is more appropriate [IFRS7p13C]. For instance, an entity may choose to disclose one table for its assets (and a
separate table for its liabilities) which are subject to a master netting arrangements. The specific disclosure requirements are listed
below, however, in general terms, each table will disclose:
i) Gross assets (or liabilities) subject to a master netting arrangement;
ii) Amounts set-off against the asset (or liability) in accordance with the offsetting criteria in paragraph 42 of IAS 32; and
iii) Amounts available for set-off against the asset (or liability) that have not been set-off.
The following table details the main disclosure requirements and provides commentary explanations of each requirement:
Disclosure requirement Explanation and commentary

A Gross amounts of recognised financial assets and These amounts relate to recognised financial instruments
recognised financial liabilities [IFRS7p13C(a)]. that are subject to an enforceable master netting
arrangement or similar agreement irrespective of whether
they meet the offsetting criteria. However, they do not relate
to any amounts recognised as a result of collateral
agreements that do not meet the offsetting criteria in
paragraph 42 of IAS 32 (such amounts will be disclosed
under D below) [IFRS7pB43].
B The amounts that are set-off in accordance with the criteria Amounts disclosed are limited to the amounts that are
in paragraph 42 of IAS 32 [IFRS7p13C(b)]. subject to set-off. For example, if the gross amount of the
asset is larger than the gross amount of the liability
(assuming the asset and liability meet the offsetting
criteria), the financial asset disclosure table will include the
entire amount of the derivative asset (in accordance with
‘A’) and the entire amount of the derivative liability
(in accordance with ‘B’). However, while the financial
liability disclosure table will include the entire amount of the
derivative liability (in accordance with ‘A’), it will only
include the amount of the derivative asset (in accordance
with ‘B’) that is equal to the amount of the derivative liability
[IFRS7pB44].
C The net amounts presented in the statement of financial This is simply the difference between ‘A’ and ‘B’. Note that if
position [IFRS7p13C(c)]. there are no amounts which meet the offsetting criteria then
the amounts disclosed for ‘A’ will equal the amount
disclosed for ‘C’ [IFRS7pB45].
D Amounts subject to set-off that do not qualify for offsetting The amounts disclosed under ‘D’ are limited to the
under (B) above [IFRS7p13C(d)]. amounts disclosed in ‘C’ [IFRS7p13D]. This is further
This relates to; explained in the illustrative guidance provided below.
i. amounts which are subject to set-off against the asset
(or liability) disclosed in ‘A’ which have not been offset
in the statement of financial position, and
ii. Any financial collateral (including cash collateral),
both received and pledged.
E Net amount [IFRS7p13C(e)]. Net of C and D.
Other disclosure requirements:

. An entity shall include a description in the disclosures of the rights of set-off associated with the entity’s recognised financial
assets and recognised financial liabilities subject to enforceable master netting arrangements and similar agreements that are
disclosed in accordance with ‘D’ in the table above, including the nature of those rights [IFRS7p13E].
. If the disclosure requirements listed above are disclosed in more than one note to the financial statements, an entity shall
cross-refer between those notes [IFRS7p13F].
. The amounts required to be disclosed by ‘C’ in the table above must be reconciled to the individual line item amounts
presented in the statement of financial position [IFRS7pB46].
. To meet the objective of the disclosure requirements an entity may need to supplement them with additional (qualitative)
disclosures, depending on the terms of the enforceable master netting arrangements and related agreements, including the
nature of the rights of set-off, and their effect or potential effect on the entity’s financial position [IFRS7pB53].

Disclosure options
In making the quantitative disclosure requirements listed in items ‘A’ to ‘E’ in the table above, IFRS 7 provides the option of:
i) Making all disclosures ‘A’ to ‘E’ by type (of financial instrument or transaction), or
ii) Making disclosures ‘A’ to ‘C’ by type and making disclosures ‘C’ to ‘E’ by counterparty. Under this option, disclosure for item
‘C’ is therefore made both by type and by counterparty.
If option (ii) is taken, amounts that are individually significant in terms of total counterparty amounts shall be separately disclosed
and the remaining individually insignificant counterparty amounts shall be aggregated into one line item [IFRS7pB52].
Commentary – IFRS 7, Disclosures
It is not uncommon for a fund to engage in transactions with several different counterparties and therefore be subject to several
different master netting arrangements. As a result, care must be taken to match assets and liabilities only to amounts that are
subject to offset with assets or liabilities held with the same counterparty.
For example, Fund W engages in derivative trading with 3 different counterparties. Transactions with each counterparty are
governed by separate master netting agreements. However, the offsetting criteria under paragraph 42 of IAS32 have NOT been
met. For simplicity, no collateral has been received or pledged with any counterparty. Relevant balances are below:
Asset Liability
Counterparty X 4 4
Counterparty Y 5 0
Counterparty Z 6 11
Total 15 15
Quantitative asset disclosure for Fund W’s derivatives are as follows:
Gross assets per ‘A’ – 15

Amount offset per ‘B’ – 0
Net per ‘C’ – 15
Amount per ‘D’ – 10
Net per ‘E’ – 5
As shown above, although Fund W has gross derivative assets of 15 and gross derivative liabilities of 15, which are all subject to
master netting arrangements, the net amount per ‘E’ is 5. The reason for this is that Fund W has zero liabilities subject to set off
with Counterparty Y and, while the Fund has a liability of 11 with Counterparty Z, only an amount of 6 can be used in the
disclosure since the amount disclosed under ‘D’ is limited to the gross asset held with that counterparty.
This concept is further explained in the illustrative disclosure below.
The following illustrative disclosure is based on a fictional fund (Fund A) which engages in derivatives, repurchase and reverse
repurchase transactions with various counterparties. The transactions with counterparties are all governed by separate master
netting agreements which fall within the scope of IFRS 7. The following table summarises the gross assets, liabilities and collateral
relevant to each counterparty.
Counterparty Counterparty Counterparty Counterparty

1 2 3 4 TOTAL
Derivative assets not offset per IAS 32p42 1,000 720 220 – 1,940
Derivative assets offset per IAS 32p42 * 100 – 50 – 150
Derivative Liabilities not offset per IAS 32p42 (400) (1,200) (300) – (1,900)
Derivative Liabilities offset per IAS 32p42 * (100) – (50) – (150)
Amounts receivable under agreements to resell – – – 500 500
Amounts payable under agreements to repurchase – – – (650) (650)
Cash paid as collateral – 400 – – 400
Cash received as collateral (500) – – – (500)
Investments pledged by counterparty to Fund ** – – – (510) (510)
Investments pledged by Fund to counterparty – 150 50 700 900
* These balances are not reflected in the statement of financial position as they have been offset in accordance with IAS 32
** This balance is not reflected in the statement of financial position as it does not meet the recognition criteria
The following illustrative disclosure includes extracts from the Fund’s statement of financial position and disclosure required by
IFRS 7. The IFRS 7 disclosure requirements are illustrated using both disclosure options mentioned previously.

Illustrative Disclosure:
Fund A
Statement of financial position (EXTRACTS)
Assets
Derivatives 1,940
Amounts receivable under agreements to resell 500
Cash collateral receivable 400
Investments pledged by Fund 900
Liabilities
Derivatives (1,900)
Amounts payable under agreements to repurchase (650)
Cash collateral payable (500)
Notes – Offsetting and amounts subject to master netting arrangements and similar agreements
IFRS7p13C, Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements1:
B51
Gross amounts Gross amounts Net amounts of Related amounts not set-off in the
of recognised of recognised financial assets statement of financial position
financial assets financial presented in
liabilities the statement
set-off in the of financial
statement of position
financial
position
Description
Derivatives 2,090 150 1,940 1,340 500 100
Reverse repo receivable 500 – 500 500 – –
IFRS7p13C, Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements:
B51
Gross amounts Gross amounts Net amounts Related amounts not set-off in the
of recognised of recognised of financial statement of financial position
financial financial assets liabilities
liabilities set-off in the presented in
statement of the statement
Instruments pledged
financial of financial
position position
Description
Derivatives 2,050 150 1,900 1,540 330 30
Repo payable 650 – 650 650 – –
1
This table illustrates Fund A’s application of the quantitative disclosure requirements (requirements ‘A’ to ‘E’ detailed in the table further above) by TYPE of
financial instrument (ie. the first option).

Commentary – Quantitative disclosures
‘A’ –
In the above example, amounts disclosed under ‘A’ would include derivative assets, derivative liabilities, amounts
receivable under agreements to resell and amounts payable under agreements to repurchase. Amounts disclosed
under ‘A’ do not relate to any amounts recognised as a result of collateral agreements that do not meet the offsetting
criteria in paragraph 42 of IAS32. As a result, the cash collateral receivable and payable as well as the financial assets
pledged by the Fund will not be presented under ‘A’.
For the asset table, the gross derivative would equal all amounts subject to a master netting arrangement, including
amounts set-off in the SoFP. This would be 1,940 + 150 = 2,090. Similarly, the gross derivative liability would be
1,900 + 150 = 2,050.
‘B’ –
The amounts that are set off in accordance with the criteria in paragraph 42 of IAS32 will be disclosed here.
‘C’ –
This is the difference between ‘A’ and ‘B’ (this amount should reconcile to the statement of financial position).
‘D’ –
Assets:
The amount disclosed for derivatives is calculated as follows:
Counterparty Counterparty Counterparty TOTAL $

1 2 3
Net derivative asset 1,000 720 220 1,940
Derivative liability subject to set off (400) (720) (220) 1,340
Sub total 600 0 0 600
Cash collateral received (500) n/a n/a (500)
Net 100 0 0 100
For the amounts receivable under agreements to resell, although the Fund has a payable to Counterparty 4 of 650
and has also received pledged collateral of 510, the value disclosed under ‘D’ is limited to 500 which is the gross
asset amount and the amount disclosed in ‘C’.
‘D’ –
Liabilities:
The amount disclosed for derivatives is calculated as follows:
Counterparty Counterparty Counterparty TOTAL $

1 2 3
Net derivative liability 400 1,200 300 1,900
Derivative asset subject to set off (400) (720) (220) (1,340)
Sub total 0 480 80 560
Investments pledged by Fund n/a (150) (50) (200)
Sub total 0 330 30 360
Cash collateral provided n/a (330) 0 (330)
Net 0 0 30 30
The amount disclosed under ‘D’ relating to financial instruments (1,540) is comprised of the derivative assets subject
to set off (1,340) plus the investments pledged by the Fund (200).
For Counterparty 2, although 400 cash collateral was provided, the amount disclosed for ‘D(ii)’ is limited to the net
amount remaining, which in the above scenario is 330.
For the amounts payable under agreements to repurchase, although the Fund has a receivable from Counterparty D
of 500 and has pledged collateral of 700, the value disclosed under ‘D’ is limited to 650 which is the gross liability
amount and the amount disclosed in ‘C’.
‘E’ –
This is the difference between ‘C’ and ‘D’

The following table illustrates Fund A’s application of the quantitative disclosure requirements (requirements
‘A’ to ‘E’ detailed in the table further above) by COUNTERPARTY (ie. the second option). Under this option, the
Fund will disclose items ‘A’ to ‘C’ by type and items ‘C’ to ‘E’ by counterparty.
Disclosure of items ‘A’ to ‘C’ by type will be the same as illustrated in the tables above. The following tables
therefore just illustrate items ‘C’ to ‘E’ by counterparty:
IFRS7p13C, Financial assets subject to offsetting, enforceable master netting arrangements and similar agreements:
B52
C = A-B D E = C-D
Net amounts of Related amounts not set-off in the statement of
financial assets financial position
presented in the
statement of
Financial collateral received
financial position
Instruments
Counterparty 1 1,000 400 500 100
Counterparty 2 720 720 – –
IFRS7p13C, Financial liabilities subject to offsetting, enforceable master netting arrangements and similar agreements:
B52
C = A-B D E = C-D
Net amounts of Related amounts not set-off in the statement of
financial liabilities financial position
presented in the
statement of
Financial collateral pledged
financial position
Instruments
Counterparty 2 1,200 870 330 –
Counterparty 3 300 270 – 30
Commentary – Quantitative disclosures (continued)
Disclosure by counterparty:
From the tables above it can be seen that the net amounts presented in ‘E’ are the same regardless of which
presentation option is used by the fund.
Refer to previous commentary boxes for explanations on how the individual amounts presented in the counterparty
table were calculated.
Collateral and disclosure under item ‘D’:
For the purpose of this disclosure an entity shall disclose collateral at its fair value. This applies both to collateral
received and collateral pledged [IFRS7pB48].
The amounts disclosed in accordance with ‘D’ should also relate to actual collateral received or pledged and not to
any resulting payables or receivables recognised to return or receive back such collateral [IFRS7pB48].

IFRS7p13E, Transactions with Counterparty 1, 2, 3 and 4 are governed by separate master netting agreements. Each agreement
B50 allows for net settlement of certain open contracts where the Fund and respective counterparty both elect to settle
on a net basis. In the absence of such an election, contracts will be settled on a gross basis. However, each party to
the master netting agreement will have the option to settle all open contracts on a net basis in the event of default of
the other party. Per the terms of each master netting agreement, an event of default includes the following:
. failure by a party to make payment when due;
. failure by a party to perform any obligation required by the agreement (other than payment) if such failure is not
remidied within 30 days after notice of such failure is given to the party;
. bankruptcy.
IFRS7pB50 Investments pledged as collateral by the Fund can be sold or repledged by the respective counterparty. Cash
collateral received is restricted and does not form part of the Fund’s cash and cash equivalents. Under the terms of the
master netting agreements, collateral can only be seized by a party in the event of default of the other party.
Commentary – Qualitative disclosures
An entity shall include a description in the disclosures of the rights of set off associated with the entity’s recognised
financial assets and recognised financial liabilities subject to enforceable master netting arrangements and similar
agreements that are disclosed in accordance with item ‘D’, including the nature of those rights [IFRS7p13E].
For example:
. An entity shall describe its conditional rights.
. For instruments subject to rights of set-off that are not contingent on a future event but that do not meet the
remaining criteria in IAS 32p42, the entity shall describe the reason(s) why the criteria are not met.
. For any financial collateral received or pledged, the entity shall describe the terms of the collateral agreement (for
example, when the collateral is restricted) [IFRS7pB50].
In order to make the above required disclosures an entity will need to analyse the terms contained in its
agreements. The qualitative disclosures provided above are illustrative only and may not necessarily be consistent
with the terms contained in master netting and similar agreements of all funds.

Appendix XI – Funds whose shares are transacted using a different measurement basis
Appendix XI – Funds whose shares are transacted using a different measurement basis for certain
assets or liabilities, when compared to IFRS
A fund’s prospectus may require certain items to be accounted for differently when calculating the net asset value for
transacting its own shares (the ‘‘trading NAV’’), compared to the requirements of IFRS. For instance, IFRS requires set-up
costs to be expensed when incurred however, a fund’s prospectus may require such costs to be amortised over several
years for the purpose of determining the trading NAV. In such a circumstance the fund’s financial statements will have to
include the total expense in the period incurred with no amortisation in order to comply with IFRS, however this would lead
to the fund having a trading NAV that is different from the sum of the fund’s assets and liabilities (excluding redeemable
shares) calculated in accordance with IFRS. This appendix addresses how such differences should be treated.
Equity vs Liability:
The treatment of such differences differs depending on whether the shares of the fund are classified as equity or liabilities under IAS
321,2. This is because different measurement criteria apply to the shares depending on the classification.
Equity:
The IFRS framework [paragraph 4.4] defines equity simply as ‘‘the residual interest in the assets of the entity after deducting all its
liabilities’’. As such, if the shares are considered to be equity instruments then their measurement would have to equate to total
assets less total liabilities calculated in accordance with IFRS. In this circumstance there would therefore be a difference between
the trading NAV of the fund (calculated in accordance with the prospectus) and the net asset value (equity value) calculated in
accordance with IFRS, however it is permissible to disclose and explain the nature of this difference in the notes to the financial
statements. No adjustment to the primary statements is required3.
Commentary – Example note disclosure when shares are presented as equity under IAS 32.
As mentioned above, no adjustment to the primary statements is necessary in this scenario if the shares were classified as
equity. However, a fund may still wish to explain the difference between its trading net asset value and its equity as per the
Statement of Financial Position. The following is example note disclosure that can be used:
Example Note:
The Fund’s prospectus requires set-up costs to be amortised over a period of 4 years for the purpose of calculating its trading
net asset value, whereas IFRS requires set-up costs to be expensed as incurred. All set-up costs have been expensed during
the year ended 31 December 2018 in accordance with IFRS, however this has resulted in a difference between the Fund’s
trading net asset value and the sum of assets and liabilities measured in accordance with IFRS. The Fund’s shares are classified
as equity in accordance with IAS 32 and therefore equate to the residual value of the Fund’s total assets less its total liabilities.
The following table shows the reconciliation of the Fund’s equity value to its trading net asset value:
As at December 31
2019 2018
Equity as per Statement of Financial Position 79,543 83,924
Adjustment for set-up costs 500 750
Trading net asset value calculated in accordance with the Fund’s Prospectus 80,043 84,674
Liability:
If shares are considered to be liabilities under IAS 32 then IFRS requires the liability to be measured at fair value or amortised cost.
The primary input of measurement would be the amount payable upon redemption of the shares4, which in turn would be based on
the trading net asset value in accordance with the fund’s prospectus. In this situation the liability measurement of the shares will not
equate to the sum of the fund’s assets and liabilities (excluding the shares). This difference therefore becomes an adjustment that
needs to be presented in the primary statements. The following illustrates how such an adjustment is presented.
1
Where the criteria listed in IAS32p16A&B are met a fund’s shares shall be classified as equity.
2
For the purpose of this appendix, set-up costs are not considered to have a substantial impact on the total expected cash flows attributable to the puttable shares over the life
of the instrument. If the impact of set-up costs was substantial then IAS 32p16A(e) should be considered in determining whether the shares should be classified as equity or
liabilities.
3
Refer to PwC Q&A solution ‘‘Dual Net Asset Value Reporting’’.
4
The fair value of a financial liability with a demand feature (e.g. a demand deposit) is not less than the amount payable on demand, discounted from the first date that the
amount could be required to be paid [IFRS13p47]. In cases where the trading NAV is higher than the sum of assets and liabilities (as illustrated in this Appendix) an adjustment
will be required, however if the trading NAV is lower than the sum of assets and liabilities there should be no adjustment since all net assets are attributable to the shareholders.

Example scenario:
The fund commenced operations on 1 January 2018 and incurred e1,000 in set-up costs. The fund’s year end is 31 December and
the policy per the fund’s prospectus is to amortise all set-up costs over 4 years.
Statement of Operations: Statement of Financial Position:

Expense Capitalised set-up costs
Per IFRS Per prospectus Per IFRS Per prospectus
Year ended 31 Dec 2018 1,000 250 – 750
Year ended 31 Dec 2019 250 – 500
Year ended 31 Dec 2020 250 – 250
Year ended 31 Dec 2021 250 – –
The above scenarios results in an adjustment of e750 at the end of 31 December 2018 and an adjustment of e500 at the end of
31 December 2019.
As at 31 December
2019 2018
Assets
Current assets
Financial assets at fair value through profit or loss 78,000 91,000
Due from brokers 2,000 950
Other receivables and prepayments 500 440
Cash and cash equivalents 350 325
Liabilities
Current liabilities
Financial liabilities at fair value through profit or loss (250) (7,500)
Due to brokers (800) (770)
Accrued expenses (257) (521)
1p55 Liabilities (excluding net assets attributable to holders of redeemable shares) (1,307) (8,791)
32IE32 Net assets attributable to holders of redeemable shares (before set-up cost adjustment) 79,543 83,924
Represented by:
1p54(m) Net assets attributable to holders of redeemable shares (at trading value) 80,043 84,674
1p55, 78(e) Adjustment for set-up costs* (500) (750)

Statement of comprehensive income

2019 2018
Income Note
Dividend income 1,538 1,000
Other net changes in fair value on financial assets and financial liabilities at
fair value through profit or loss 7,500 5,000
Total net income/(loss) 9,038 6,000
Expenses
Management fee (800) (650)
Total operating expenses (1,065) (900)
Operating profit/(loss) 7,973 5,100
Finance costs
Distributions to holders of redeemable shares (500) (500)
Profit/(loss) after distributions 7,473 4,600
Adjustment for set-up costs* 12 (250) 750
32IE32, Increase/(decrease) in net assets attributable to holders of redeemable

1p85, 32p35 shares from operations 7,223 5,350
Statement of changes in net assets attributable to holders of redeemable shares

2019 2018
Note
Net assets attributable to holders of redeemable shares at 1 January

(before set up cost adjustment) 83,924 –
Represented by:
Net assets attributable to holders of redeemable shares at 1 January (at
trading value) 84,674 –
Adjustment for set-up costs (750) –
Net assets attributable to holders of redeemable shares at 1 January (at

trading value) 84,674 –

Redemption of redeemable shares (15,200) –
Net increase from share transactions (11,854) 79,324
Profit/(loss) after distributions and tax 7,473 4,600
Adjustment for set-up costs* 12 (250) 750
Increase/(decrease) in net assets attributable to holders of redeemable

shares from operations 7,223 5,350
Net assets attributable to holders of redeemable shares at 31 December

(at trading value) 80,043 84,674

Commentary – Subsidiary providing investment services
* The amount presented in the Statement of Comprehensive Income represents the movement in the adjustment during the
year. As 2018 is the first year of operation, the adjustment moved from nil to e750. During 2019 the adjustment decreased from
e750 to e500 in the statement of Financial Position, therefore the movement presented in the Statement of Comprehensive
Income was (e250).
Notes to the financial statements (extracts)
Note 12
The Fund’s prospectus requires set-up costs to be amortised over a period of 4 years for the purpose of calculating its
trading net asset value, whereas IFRS requires set-up costs to be expensed as incurred. All set-up costs have been
expensed during the year ended 31 December 2018 in accordance with IFRS, however this has resulted in a
difference between the Fund’s trading net asset value and the sum of assets and liabilities (excluding redeemable
shares) measured in accordance with IFRS. The Fund’s shares are classified as liabilities in accordance with IAS 32.
This liability is measured at the amount which the Fund is obligated to pay upon redemption, which is based on the
trading net asset value calculated in accordance with the prospectus. The resulting difference of e500 (2018: e750) is
presented in the Statement of Financial Position and the movement in these differences of (e250) (2018: e750) has
been presented in the Statement of Comprehensive Income.

Appendix XII – New standards and amendments
This appendix provides a summary of (a) new standards and amendments that are effective for the first time for periods
commencing on 1 January 2019 (i.e. years ending 31 December 2019) and (b) forthcoming requirements, being standards and
amendments that will become effective after 1 January 2019.
New standards and amendments – applicable 1 January 2019
The following standards and interpretations apply for the first time to financial reporting periods commencing on or after 1 January
2019:
Title Key requirements Effective Date*

IFRS 16 Leases IFRS 16 will affect primarily the accounting by lessees and will result 1 January 2019
in the recognition of almost all leases on balance sheet. The Early adoption is
standard removes the current distinction between operating and permitted only if
financing leases and requires recognition of an asset (the right to IFRS 15 is
use the leased item) and a financial liability to pay rentals for adopted at the
virtually all lease contracts. An optional exemption exists for short- same time.
term and low-value leases.
The income statement will also be affected because the total
expense is typically higher in the earlier years of a lease and lower
in later years. Additionally, operating expense will be replaced with
interest and depreciation, so key metrics like EBITDA will change.
Operating cash flows will be higher as cash payments for the
principal portion of the lease liability are classified within financing
activities. Only the part of the payments that reflects interest can
continue to be presented as operating cash flows.
The accounting by lessors will not significantly change. Some
differences may arise as a result of the new guidance on the
definition of a lease. Under IFRS 16, a contract is, or contains, a
lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
Interpretation 23 Uncertainty over This Interpretation clarifies how to apply the recognition and 1 January 2019
income tax treatments measurement requirements in IAS 12 when there is uncertainty over
income tax treatments. In such a circumstance, an entity shall
recognise and measure its current or deferred tax asset or liability
applying the requirements in IAS 12 based on taxable profit (tax
loss), tax bases, unused tax losses, unused tax credits and tax rates
determined applying this Interpretation.
When there is uncertainty over income tax treatments, this
Interpretation addresses:
a. whether an entity considers uncertain tax treatments
separately;
b. the assumptions an entity makes about the examination of tax
treatments by taxation authorities;
c. how an entity determines taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits and tax rates; and
d. how an entity considers changes in facts and circumstances.
Prepayment Features with The narrow-scope amendments made to IFRS 9 Financial 1 January 2019
Negative Compensation – Instruments in December 2017 enable entities to measure certain
Amendments to IFRS 9 prepayable financial assets with negative compensation at
amortised cost. These assets, which include some loan and debt
securities, would otherwise have to be measured at fair value
through profit or loss.
To qualify for amortised cost measurement, the negative
compensation must be ‘reasonable compensation for early
termination of the contract’ and the asset must be held within a
‘held to collect’ business model.
* Applicable to reporting periods commencing on or after the given date.


Long-term Interests in Associates The amendments clarify the accounting for long-term interests in an 1 January 2019
and Joint Ventures – Amendments associate or joint venture, which in substance form part of the net
to IAS 28 investment in the associate or joint venture, but to which equity
accounting is not applied. Entities must account for such interests
under IFRS 9 Financial Instruments before applying the loss
allocation and impairment requirements in IAS 28 Investments in
Associates and Joint Ventures.
Annual Improvements to IFRS The following improvements were finalised in December 2017: 1 January 2019
Standards 2015–2017 Cycle . IFRS 3 – clarified that obtaining control of a business that is a
joint operation is a business combination achieved in stages.
. IFRS 11 – clarified that the party obtaining joint control of a
business that is a joint operation should not remeasure its
previously held interest in the joint operation.
. IAS 12 – clarified that the income tax consequences of dividends
on financial instruments classified as equity should be
recognised according to where the past transactions or events
that generated distributable profits were recognised.
. IAS 23 – clarified that if a specific borrowing remains outstanding
after the related qualifying asset is ready for its intended use or
sale, it becomes part of general borrowings.
Plan Amendment, Curtailment or The amendments to IAS 19 clarify the accounting for defined benefit 1 January 2019
Settlement – Amendments to plan amendments, curtailments and settlements. They confirm that
IAS 19 entities must:
. calculate the current service cost and net interest for the
remainder of the reporting period after a plan amendment,
curtailment or settlement by using the updated assumptions
from the date of the change
. any reduction in a surplus should be recognised immediately in
profit or loss either as part of past service cost, or as a gain or
loss on settlement. In other words, a reduction in a surplus must
be recognised in profit or loss even if that surplus was not
previously recognised because of the impact of the asset ceiling
. separately recognise any changes in the asset ceiling through
other comprehensive income.

Forthcoming requirements
As at 30 September 2019, the following standards and interpretations had been issued but were not mandatory for annual reporting
periods ending 31 December 2019. For more recent information please refer to our web site at www.pwc.com/ifrs.

IFRS 17 Insurance Contracts IFRS 17 was issued in May 2017 as replacement for IFRS 4 1 January 2021
Insurance Contracts. It requires a current measurement model (likely to be
where estimates are re-measured each reporting period. Contracts extended to
are measured using the building blocks of: 1 January 2022)
. discounted probability-weighted cash flows
. an explicit risk adjustment, and
. a contractual service margin (‘‘CSM’’) representing the
unearned profit of the contract which is recognised as revenue
over the coverage period.
The standard allows a choice between recognising changes in
discount rates either in the income statement or directly in other
comprehensive income. The choice is likely to reflect how insurers
account for their financial assets under IFRS 9.
An optional, simplified premium allocation approach is permitted for
the liability for the remaining coverage for short duration contracts,
which are often written by non-life insurers.
There is a modification of the general measurement model called
the ‘variable fee approach’ for certain contracts written by life
insurers where policyholders share in the returns from underlying
items. When applying the variable fee approach the entity’s share of
the fair value changes of the underlying items is included in the
contractual service margin. The results of insurers using this model
are therefore likely to be less volatile than under the general model.
The new rules will affect the financial statements and key
performance indicators of all entities that issue insurance contracts
or investment contracts with discretionary participation features.
Definition of Material – The IASB has made amendments to IAS 1 Presentation of Financial 1 January 2020
Amendments to IAS 1 and IAS 8 Statements and IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors which use a consistent definition of materiality
throughout International Financial Reporting Standards and the
Conceptual Framework for Financial Reporting, clarify when
information is material and incorporate some of the guidance in IAS
1 about immaterial information.
In particular, the amendments clarify:
. that the reference to obscuring information addresses situations
in which the effect is similar to omitting or misstating that
information, and that an entity assesses materiality in the context
of the financial statements as a whole, and
. the meaning of ‘primary users of general purpose financial
statements’ to whom those financial statements are directed, by
defining them as ‘existing and potential investors, lenders and
other creditors’ that must rely on general purpose financial
statements for much of the financial information they need.
Definition of a Business – The amended definition of a business requires an acquisition to 1 January 2020
Amendments to IFRS 3 include an input and a substantive process that together
significantly contribute to the ability to create outputs. The definition
of the term ‘outputs’ is amended to focus on goods and services
provided to customers, generating investment income and other
income, and it excludes returns in the form of lower costs and other
economic benefits.
The amendments will likely result in more acquisitions being
accounted for as asset acquisitions.


Revised Conceptual Framework The IASB has issued a revised Conceptual Framework which will be 1 January 2020
for Financial Reporting used in standard-setting decisions with immediate effect. Key
changes include:
. increasing the prominence of stewardship in the objective of
financial reporting
. reinstating prudence as a component of neutrality
. defining a reporting entity, which may be a legal entity, or a
portion of an entity
. revising the definitions of an asset and a liability
. removing the probability threshold for recognition and adding
guidance on derecognition
. adding guidance on different measurement basis, and
. stating that profit or loss is the primary performance indicator
and that, in principle, income and expenses in other
comprehensive income should be recycled where this
enhances the relevance or faithful representation of the financial
statements.
No changes will be made to any of the current accounting
standards. However, entities that rely on the Framework in
determining their accounting policies for transactions, events or
conditions that are not otherwise dealt with under the accounting
standards will need to apply the revised Framework from 1 January
2020. These entities will need to consider whether their accounting
policies are still appropriate under the revised Framework.
Interest rate benchmark reform – The amendments modify some specific hedge accounting 1 January 2020
Amendment to IFRS 7, IFRS 9 and requirements to provide certain reliefs in connection with interest
IAS 39 rate benchmark reform. The reliefs relate to hedge accounting and
have the effect that IBOR reform should not generally cause hedge
accounting to terminate. However, any hedge ineffectiveness
should continue to be recorded in the income statement. Given the
pervasive nature of hedges involving IBOR-based contracts, the
reliefs will affect companies in all industries.

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Authored by:
Parmanan Deopersad Mike Baker
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Questions?
PwC clients who have questions about this publication should contact their engagement partner. Engagement teams that have
questions should contact members of the Asset Management team in Accounting Consulting Services

Illustrative IFRS financial statements 2019 – Investment funds is designed for the information of readers. While every effort has been
made to ensure accuracy, information contained in this publication may not be comprehensive or some information may have been
omitted that may be relevant to a particular reader. This publication is not intended as a study of all aspects of IFRS or as a
substitute for reading the actual standards and interpretations when dealing with specific issues.
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by PricewaterhouseCoopers. Recipients should not act on the basis of this publication without seeking professional advice.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional
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PwC – Illustrative IFRS financial statements 2019 – Investment funds i

PwC – Illustrative IFRS financial statements 2019 – Investment funds iii

PwC – Illustrative IFRS financial statements 2019 – Investment funds v

(All amounts in e thousands unless otherwise stated)

Statement of financial position

1p54, 60, 113 As at 31 December

The notes on pages 5 to 31 are an integral part of these financial statements.

PwC – Illustrative IFRS financial statements 2019 – Investment funds 1

(All amounts in e thousands unless otherwise stated)

Statement of comprehensive income1 – by nature of expense

1p82, 81B, 85, Year ended 31 December

Profit/(loss) after distributions and before tax 12,601 (2,637)

The notes on pages 5 to 31 are an integral part of these financial statements.

2 PwC – Illustrative IFRS financial statements 2019 – Investment funds

(All amounts in e thousands unless otherwise stated)

Statement of changes in net assets attributable to holders of redeemable shares1

Year ended 31 December

The notes on pages 5 to 31 are an integral part of these financial statements.

PwC – Illustrative IFRS financial statements 2019 – Investment funds 3

(All amounts in e thousands unless otherwise stated)

Statement of cash flows1

Net (increase)/decrease in due from/to brokers (1,144) 124

7p31 Interest received 917 482

The notes on pages 5 to 31 are an integral part of these financial statements.

4 PwC – Illustrative IFRS financial statements 2019 – Investment funds

(All amounts in e thousands unless otherwise stated)

Notes to the financial statements

2. Summary of significant accounting policies

1p112(a) 2.1 Basis of preparation

PwC – Illustrative IFRS financial statements 2019 – Investment funds 5

(All amounts in e thousands unless otherwise stated)

1p119 2.2 Foreign currency translation

21p21, 28, (b) Transactions and balances

IFRS9p4.1.1 (a) Classification

IFRS9pB4.1.6 (i) Assets

IFRS9p4.2.1 (ii) Liabilities

Commentary – Determining business model under IFRS 9

6 PwC – Illustrative IFRS financial statements 2019 – Investment funds

(All amounts in e thousands unless otherwise stated)

investing into the fund?

Significant accounting judgements in determining business model

PwC – Illustrative IFRS financial statements 2019 – Investment funds 7

(All amounts in e thousands unless otherwise stated)

IFRS7B5(c) (b) Recognition, derecognition and measurement

(c) Fair value estimation

Commentary – IFRS 13 and fair value estimation

8 PwC – Illustrative IFRS financial statements 2019 – Investment funds

(All amounts in e thousands unless otherwise stated)

(d) Transfers between levels of the fair value hierarchy

IFRS7p21 2.4 Offsetting financial instruments

IFRS7p21 2.5 Due from and due to brokers

Commentary – Expected credit losses

IFRS7p21 2.6 Cash and cash equivalents

IFRS7p21 2.7 Accrued expenses

IFRS7p21 2.8 Redeemable shares

PwC – Illustrative IFRS financial statements 2019 – Investment funds 9