Summary: An examination was performed of the statement of financial condition of the Export-Import Bank of the United States (Eximbank) as of September 30, 1977, and of the statements of income and analysis of reserve for contingencies and defaults and of changes in financial position for the year then ended and for the 3-month period ending September 30, 1976. In computing net income, the Bank normally deducts payments on guaranty and insurance claims. It modified this practice in 1977 when unusually large guaranty payments were required on defaulted commercial loans to Zaire, and it treated these payments as the cost of purchased loans now held as assets. GAO concurred with this treatment. The Bank necessarily states its net income before providing for losses that may be sustained on loans, guarantees, and insurance, but it retains accumulated net income after dividends as a reserve for such losses. The reserve is increasing while the total amount at risk is decreasing, but the amount at risk on delinquent and rescheduled loans has been increasing. Therefore, no opinion was expressed on the adequacy of the reserve. Except for the amount reserved for contingencies and defaults, the financial statements presented fairly the financial position of Eximbank and the results of its operations and changes in financial position for the periods examined in conformity with generally accepted accounting principles applied on a consistent basis.
