Volume 2 - IFC

INTERNATIONAL FINANCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE R – SEGMENT REPORTING
For management purposes, IFC’s business comprises two segments: client services and treasury services. The client services segment consists
primarily of lending, investing in debt and equity securities, and advisory services activities. Operationally, the treasury services segment consists
of the borrowing, liquid asset management, asset and liability management and client risk management activities. Consistent with internal
reporting, net income (expense) from asset and liability management and client risk management activities in support of client services is
allocated to the client services segment.
The assessment of segment performance by senior management includes net income for each segment, return on assets, and return on capital
employed. IFC’s management reporting system and policies are used to determine revenues and expenses attributable to each segment.
Consistent with internal reporting, administrative expenses are allocated to each segment based largely upon personnel costs and segment
headcounts. Transactions between segments are immaterial and, thus, are not a factor in reconciling to the consolidated data.
The accounting policies of IFC’s segments are, in all material respects, consistent with those described in Note A, “Summary of Significant
Accounting and Related Policies.”
An analysis of IFC’s major components of income and expense by business segment for the years ended June 30, 2009, June 30, 2008, and
June 30, 2007, is given below (US$ millions):
2009 2008 2007
Client Treasury Client Treasury Client Treasury
services services Total services services Total services services Total
Income from loans and
guarantees $ 857 $ 14 $ 871 $ 1,054 $ 11 $ 1,065 $ 1,062 $ - $ 1,062
(Provision for) release of
provision for losses on
loans and guarantees (438) - (438) (38) - (38) 43 - 43
(Loss) income from equity
Investments (42) - (42) 1,688 - 1,688 2,292 - 2,292
Income from debt securities 71 - 71 163 - 163 27 - 27
Income from liquid asset
trading activities - 474 474 - 473 473 - 618 618
Charges on borrowings (303) (185) (488) (528) (254) (782) (510) (291) (801)
Other income 153 - 153 113 - 113 99 - 99
Other expenses (617) (12) (629) (547) (8) (555) (493) (7) (500)
Foreign currency transaction
gains (losses) on
non-trading activities 10 - 10 (39) - (39) (5) - (5)
Expenditures for
advisory services (129) - (129) (123) - (123) (96) - (96)
Expenditures for performance
-based grants and for IFC
SME Ventures for IDA
countries (6) - (6) (27) - (27) - - -
Net gains (losses) on other
non-trading financial
instruments accounted
for at fair value 71 381 452 92 17 109 (106) 7 (99)
Grants to IDA (450) - (450) (500) - (500) (150) - (150)
Net (loss) income $ (823) $ 672 $ (151) $ 1,308 $ 239 $ 1,547 $ 2,163 $ 327 $ 2,490
Geographical segment data in respect of client services are disclosed in Note C, and the composition of Liquid Assets is provided in Note B.
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