19.8.86 Official Journal of the European Communities No C 208/3 
FINANCIAL STATEMENTS OF THE EUROPEAN COAL AND STEEL COMMUNITY 
FOR 1985 AND 1984 
(86/C 208/03) 
In accordance with undertaking given by the Commission on behalf of the European Coal and 
Steel Community with regard to its borrowing activities, the following financial statements of 
the ECSC, drawn up in conformity with Article 78 of the Treaty establishing the ECSC, are 
published below: 
— Balance sheets of the European Coal and Steel Community at 31 December 1985 and 
31 December 1984, 
— Profit and loss accounts for the years ending 31 December 1985 and 31 December 1984, 
— Allocation of profit for the years ending 31 December 1985 and 31 December 1984. 
These financial statements are accompanied by the Report of the Court of Auditors, provided 
for under Article 78f (5) of the ECSC Treaty, deadling with the financial operations of the 
ECSC for the year 1985 with the exception of those relating to revenue and expenditure of an 
administrative nature. 
No C 208/4 Official Journal of the European Communities 19. 8. 86 
Balance sheets at 31 December 1985 and 31 December 1984 
(amounts expressed in ECU) 
— Before allocation of profit — 
Assets 
Cash in hand and balances with central banks 
Balances with credit institutions: 
— repayable on demand 
— with agreed maturity dates or periods of notice 
Bank deposits for coupons and bonds due but not yet presen­
ted for payment 
Debt securities held in portfolio (Note 3) 
Loans outstanding (Note 4) 
Issuing costs and redemption premiums for amortization 
Land and buildings (Note 5) 
Other assets (Note 6) 
Accruals and deferred income (Note 7) 1985 
2 751 573 
192 603 441 
1 065 613 596 
102 834 753 
509 089 878 
7 051 437 544 
61 881 898 
469 126 
78 328 425 
215 358 105 
9 280 368 339 1984 
1 709 396 
42 805 402 
1 018 812 461 
51 220 169 
619 248 668 
7 161 948 902 
72 651 843 
469 126 
114938 841 
215 168 904 
9 298 973 712 
The Notes in the Annex are an integral part of these financial statements. 
19. 8. 86 Official Journal of the European Communities No C 208/5 
— Before allocation of profit — 
Liabilities 
Amounts owed to credit institutions: with agreed maturity 
dates or periods of notice 
Coupons and bonds due but not yet presented foi 
Long- and medium-term debts (Note 8) 
Other liabilities 
Accruals and deferred income (Note 9) 
Provision for losses and expenses 
Commitments for ECSC operating budget (Note 
— legal commitments 
— commitments not yet implemented 
Total liabilities towards payment 
10): 
third 
Provisions for the financing of the ECSC operating 
(Note 11) 
Reserves (Note 12): 
— guarantee fund 
— special reserve 
— former pension fund 
Total reserves 
Profit brought forward 
Profit for the financial year parties 
budget 1985 
5 965 929 
102 834 753 
7 034 265 716 
17 138 791 
349 853 516 
2 589 652 
752 450 177 
136 423 771 
8 401 522 305 
218 100 000 
420 000 000 
165 000 000 
45 639 268 
630 639 268 
105 647 
30 001 119 
9 280 368 339 1984 
44 195 479 
51 220 169 
7 118 762 833 
1 448 496 
415 224 972 
— 
700 600 303 
186 176 545 
8 517 628 797 
113 200 000 
380 000 000 
163 000 000 
44 742 334 
587 742 334 
78 665 
80 323 916 
9 298 973 712 
No C 208/6 Official Journal of the European Communities 19. 8. 86 
Profit and loss accounts for the years ending 31 December 1985 and 31 December 1984 
(amounts expressed in ECU) 
Expenditure 
Interest payable 
Issuing costs and redemption premiums 
Commission payable 
Capital losses on securities 
Other financial costs 
Allocation to the provision for losses and expenses 
Value adjustments in respect of claims 
Administrative expenditure (fixed amount) (Note 13) 
Conversion differences (Note 2) 
Expenditure relating to fines, deposits and levies (Note 16) 
Legal commitments of the financial year (Note 10): 
— Redeployment 
— Social measures in connection with the restructuring of 
the steel industry 
— Social measures in connection with the restructuring of 
the coal industry 
— Research 
— Interest subsidies (Article 54) 
— Interest subsidies (Article 56) 
— Coking coal and metallurgical coke 
— Parity changes on legal commitments 
Allocation to provision for commitments not yet implemented 
Allocation to provisions for the financing of the ECSC 
operating budget (Note 11) 
Other expenditure 
Total expenditure 
Profit for the financial year 1985 
629 550 113 
25 660 540 
5 173 068 
1 203 887 
389 410 
2 589 652 
17 039 484 
5 000 000 
12 368 477 
6 195 270 
215 000 000 
69 886 779 
3 585 669 
74 861 326 
6 000 000 
34 318 
— 
67 500 000 
— 
1 142 037 993 
30 001 119 
1 172 039 112 1984 
625 889 826 
21 806 582 
5 053 521 
221 332 
349 365 
— 
73 802 823 
5 000 000 
— 
1 745 935 
140 000 000 
62 500 000 
60 000 000 
39 190 401 
6 243 389 
34 018 024 
6 000 000 
87 238 
55 365 906 
— 
1 980 754 
1 139 255 096 
80 323 916 
1 219 579 012 
The Notes in the Annex are an integral part of these financial statements. 
19. 8. 86 Official Journal of the European Communities No C 208/7 
Revenue 
Interest receivable (Note 14) 
Issuing and redemption premiums 
Gains on own bonds 
Gains on other securities 
Income from value adjustments in respect of securities 
Other financial revenue 
Conversion differences (Note 2) 
Income from value adjustments in respect of claims 
Levy (Note 15) 
Fines (Note 16) 
Deposits (in accordance with Decision No 3717/83/ECSC) 
Contributions from the general budget of the European Com­
munities 
Cancellations of legal commitments (Note 10) 
Cancellations of commitments not yet implemented (Note 10) 
Withdrawal from the provision for commitments not yet 
implemented (Note 10) 
Other revenue 1985 
825 451 956 
13 080 574 
11 240 619 
18 360 201 
6 073 241 
182 765 
— 
27 277 467 
149 044 836 
16 025 366 
938 361 
— 
54 569 321 
16 222 280 
33 530 494 
41 631 
1 172 039 112 1984 
803 287 504 
11 353 320 
2 317 031 
8 176 734 
4 066 438 
788 244 
2 635 040 
54 227 460 
136 761 312 
41 739 644 
414 489 
122 500 000 
15 712 352 
15 550 648 
— 
48 796 
1 219 579 012 
No C 208/8 Official Journal of the European Communities 19. 8. 86 
Allocation of profit for the years ending 31 December 1985 and 31 December 1984 
(amounts expressed in ECU) 
Profit not allocated at 1 January 
Profit for the year to be allocated 
Allocations: 
Guarantee fund 
Special reserve 
Former pension fund 
To provisions for the financing of the ECSC operating 
budget 
To the heading 'fines to be allocated to the financing of the 
ECSC operating budget' (Note 2) 
Profit not allocated at 31 December 1985 
105 647 
30 001 119 
30 106 766 
20 000 000 
9 000 000 
895 554 
— 
— 
29 895 554 
211 212 1984 
78 665 
80 323 916 
80 402 581 
40 000 000 
2 000 000 
896 934 
3 800 000 
33 600 000 
80 296 934 
105 647 
The Notes in the Annex are an integral part of these financial statements. 
19.8.86 Official Journal of the European Communities No C 208/9 
ANNEX 
Notes to financial statements at 31 December 1985 and 31 December 1984 
(amounts expressed in ECU) 
1. Presentation of financial statements 
The European Coal and Steel Community (ECSC) was established by the Treaty of 18 April 1951. 
According to the Treaty, the task of the ECSC is to contribute to the economic expansion of the 
Member States through the establishment of a common market for coal and steel. Most of the ECSC's 
funds come from levies, borrowings raised on the financial markets and direct bank loans. 
In the financial statements at 31 December 1985, changes have been made in the accounting methods 
and these are explained in Note 2. 
ECSC accounts are kept in the various currencies used for its financial activity. The financial state­
ments are expressed in ECU. 
The following rates have been used for converting year-end balance sheet amounts expressed in cur­
rency into ECU: 
Belgian and Luxembourg 
German mark 
Dutch guilder 
Pound sterling 
Danish krone 
French franc 
Italian lira 
Irish pound 
Greek drachma 
u. a. 
US dollar 
Swiss franc 
Canadian dollar 
EMU 
Japanese yen franc (Convertible) 31 December 
1985 
44,645 
2,18386 
2,46133 
0,615334 
7,95672 
6,70474 
1 489,94 
0,714055 
131,20 
0,450583 
0,887927 
1,84023 
1,24088 
0,596683 
178,207 1984 
44,7168 
2,23176 
2,51853 
0,609846 
7,98805 
6,83069 
1 371,10 
0,715023 
91,0428 
0,450111 
0,708946 
1,83830 
0,935808 
0,609770 
178,052 
2. Accounting policies and methods 
The financial statements are drawn up in accordance with generally recognized accounting principles. 
The changes in accounting methods introduced during the financial year are described in Section 2.1 
below. 
2.1. Changes in accounting methods 
ECSC operating budget 
The changes in the accounting methods used for the financial statements at 31 December 1984 
were intended to harmonize the methods used for the ECSC financial statements with the rules in 
force for the implementation of the operating budget. The work to bring the two into line con­
tinued with the financial statements at 31 December 1985, concentrating on the provisions for 
financing the operating budget. These provisions (investment interest, budgetary contingencies, 
fines to be paid) are now funded from an expenditure account and not by allocation of profits as 
was the case up to 31 December 1984. This change has led to a 67,5 million ECU drop in the 
profit for the 1985 financial year. If it had been used for the 1984 financial year, the result would 
have been a 37,4 million ECU fall in profits. 
Interest on arrears of fines, loans and levy-
Interest on arrears due from companies but not yet paid are now entered under revenue, whereas 
until 31 December 1984 only amounts actually paid were entered under this heading. This change 
has led to a 1,5 million ECU increase in the profit for the 1985 financial year. 
No C 208/10 Official Journal of the European Communities 19.8.86 
2.2. Other accounting methods 
The balances in currency are included in the balance sheets at the rates of exchange for the ECU 
as at 31 December. The conversion differences due to the revaluation of the opening balance at 
the rates of exchange for the ECU at year-end are deferred and entered in the balance under 
accruals and deferred income. They do not, therefore, affect the result for the year. On the other 
hand, the conversion differences relating to operations for the year are included in the profit and 
loss accounts. 
Value adjustments are made in respect of loans, fines receivable and levy payments receivable to 
allow for the potential risks of non-recovery. The criteria are as follows: 
— a non-specific value adjustment covers the general risk of the non-recovery of loans, 
— specific value adjustments are made when there is an actual risk in respect of given amounts 
outstanding, e.g. legal proceedings have been started, the company is in financial difficulties, 
an appeal has been brought before the Court of Justice in respect of fines receivable or there 
are other problems with debt recovery. 
3. Debt securities held in portfolio 
The securities in the portfolio are evaluated at the lower of average purchase cost or market value. 
The portfolio is made up mainly of government bonds and repurchased ECSC bonds. 
At 31 December 1985, the gross book value of repurchased ECSC bonds in portfolio is 110 395 254 
ECU (1984: 117 653 726 ECU). 
4. Loans outstanding 
This item covers the following amounts: 
1. Loans paid from borrowedfunds 
Amounts due, excluding redemption premiums 
Redemption premiums 
Parity adjustments for currency-changing transactions 
(Swaps) 
Value adjustments 
Sub-total 
2. Loans paid from own funds 
Loans paid from the special reserves for the financing 
of subsidized housing 
Loans paid from the pension fund to officials of the 
European Communities for the construction of housing 
Loans paid from the pension fund for the Friuli steel 
industry 
Loans paid for technical and economic research 
Loans paid for redeployment 
Sub-total 
Grand total 31 December 
1985 
6 969 809 225 
45 000 000 
(5 737 084) 
(134 325 976) 
6 874 746 165 
149 488 179 
23 924 579 
1 812 154 
1 363 922 
102 545 
176 691 379 
7 051 437 544 1984 
7 093 353 034 
45 000 000 
(7 058 195) 
(148 339 364) 
6 982 955 475 
152 017 095 
23 087 490 
2 297 425 
1 489 747 
101 670 
178 993 427 
7 161 948 902 
19.8.86 Official Journal of the European Communities No C 208/11 
Repayments due on the loans but not yet paid at 31 December are entered under the heading 'Other 
assets'. These loans are usually secured by guarantees from the Member States, banks or companies 
and by mortgages. 
5. Land and buildings 
The ECSC owns a building in Washington DC, entered in the ECSC books at 469 125 ECU. Its 
current value is estimated at 2,8 million ECU. 
Another building in Paris is held jointly with the European Atomic Energy Community and the Euro­
pean Economic Community. It is entered in the ECSC books at a token value of 1 ECU. Its total 
current value is estimated at 2,2 million ECU. 
6. Other assets 
Levy receivable 
Member States' contributions receivable 
Fines receivable (Note 16) 
Loans, payments due and not received 
Other 
Cumulative value adjustments 31 December 
1985 
6 962 549 
29 445 
89 171 915 
24 908 293 
3 712 975 
124 785 117 
(46 456 752) 
78 328 425 1984 
8 323 547 
6 786 429 
121 146 184 
16 954 232 
5 280 050 
158 490 442 
(43 551 601) 
114 938 841 
The item 'levy receivable' includes 1 510 420 ECU (1984: 3 524 838 ECU) in respect of coal in stock, 
payment of which is temporarily deferred under a general decision taken in 1972. In addition, 
1 801 725 ECU (1984: 1 545 749 ECU) relate to claims on debtors against whom legal proceedings 
have been instituted. 
The cumulative value adjustment refer to the items 'levy receivable', 'fines receivable' and 'loans, pay­
ments due and not received'. 
7. Accruals and deferred income (assets) 
This item comprises mostly accrued interest on loans, time deposits and the portfolio of bonds amount­
ing to 189 643 654 ECU (1984: 193 305 910 ECU) together with levies declared for November and 
December but not payable until after 31 December. 
8. Long- and medium-term debts 
The debt consists of private and public bond issues maturing between 1986 and 2001. 
9. Accruals and deferred income (liabilities) 
This item comprises mostly interest and commission on borrowings accrued at 31 December 1985, 
amounting to 280 927 747 ECU (1984: 294 281 382 ECU). 
The conversion differences arising from the revaluation of the opening balances at the end-of-year 
ECU rate of exchange, amounting to 29 550 759 ECU (1984: 67 998 849 ECU), are also included in 
this item. 
No C 208/12 Official Journal of the European Communities 19.8.86 
10. Commitments for ECSC operating budget 
In 1985, commitments for the ECSC operating budget were as follows: 
1. Legal commitments 
movements for 1985 
Redeployment 
Social measures, 
steel industry 
Social measures, 
coal industry 
Research 
Interest sub­
sidies Article 54 
Interest sub­
sidies Article 56 
Coking coal 
Total Commit­
ments at 
31 December 
1984 
329 589 716 
157 642 186 
60 000 000 
86 369 415 
16 839 551 
46 814 235 
3 345 200 
700 600 303 New 
commit­
ments 
215 000 000 
69 886 779 
3 585 669 
74 861 326 
6 000 000 
369 333 774 Cancellations 
(52 153 867) 
(1 317 255) 
(8 496) 
(947 642) 
(142 061) 
(54 569 321) Payments 
(63 805 831) 
(97 139 130) 
(18 550 000) 
(50 300 178) 
(7 371 570) 
(16 579 049) 
(9 203 139) 
(262 948 897) changes 
33 494 
78 
777 
(31) 
34 318 Commit­
ments at 
31 December 
1985 
428 663 512 
60 503 056 
41 450 000 
104 638 839 
13 045 931 
104 148 839 
752 450 177 
2. Provision for commitments not yet implemented 
movements for 1985 
Research 
Interest subsidies 
Article 54 
Interest subsidies 
Article 56 
Total Commit­
ments at 
31 December 
1984 
26 872 132 
33 842 241 
125 462 172 
186 176 545 Decisions 
51 000 000 
3 806 000 
59 997 280 
114 803 280 
(33 53 Transfers 
to legal 
commitments 
(69 886 779) 
(3 585 669) 
(74 861 326) 
(148 333 774) 
0 494) Cancellations 
(225 000) 
(15 997 280) 
(16 222 280) Commit­
ments at 
31 December 
1985 
7 760 353 
34 062 572 
94 600 846 
136 423 771 
19.8.86 Official Journal of the European Communities No C 208/13 
11. Provisions for the financing of the ECSC operating budget 
1. Financing of the operat­
ing budget from ECSC 
interest income 
— 'interest on invest­
ments and on loans 
from non-borrowed 
funds' 
— 'drawings on contin­
gency reserve' 
2. Provision for fines im­
posed but not yet paid: 
— fines expected to be 
paid the following 
year 
— fines expected to be 
paid subsequently 
3. Surplus for the budgetary 
year 
Total Provisions 
31 December 
1984 before 
allocation of 
70 000 000 
30 000 000 
13 200 000 
113 200 000 Allocation 
for 1984 
(by allocation 
of profit) 
17 000 000 
33 600 000 
(13 200 000) 
37 400 000 Provisions at 
31 December 
1984 after 
allocation of 
70 000 000 
30 000 000 
17 000 000 
33 600 000 
150 600 000 Allocation 
for 1985 
(charged to the 
current 
financial 
30 000 000 
19 400 000 
12 000 000 
6 100 000 
67 500 000 Provisions at 
31 December 
1985 
100 000 000 
49 400 000 
29 000 000 
39 700 000 
218 100 000 
As the above headings show, ECSC interest income finances two of the resources items in the ECSC 
operating budget. Amounts allocated to provisions at 31 December are used in the following year's 
budget. 
In addition, fines imposed but not yet paid are allocated to provisions, the operating budget using them 
as resources only when they are paid, whereas the fines are entered in the ECSC financial statements 
for the financial year during which the fine was imposed. A distinction is made between fines expected 
to be paid the following year, which will therefore be included under resources in the operating budget 
for that year, and fines which will be paid subsequently and which are not therefore included in the 
operating budget. 
As indicated in Note 2, allocations for the financing of the ECSC operating budget are now entered 
via an expenditure account and not by allocation of profits as was the case up to 31 December 1984. 
12. Reserves 
The guarantee fund is intended to cover loans and borrowing operations. 
The special reserve is used to grant loans from ECSC own funds to finance subsidized housing. 
The former pension fund originally represented the total pension obligations covered by the ECSC 
prior to 5 March 1968. Since that date, the Member States have assumed responsibility for the payment 
of staff pensions. This fund is used to finance housing loans for officials of the European Communi­
ties, and has also been used to grant special loans to the coal and steel industries. 
13. Administrative expenditure (fixed amount) 
The ECSC paid 5 million ECU to the administrative budget of the Commission of the European 
Communities to cover its administrative costs. 
No C 208/14 Official Journal of the European Communities 19.8.86 
14. Interest received 
At 31 December, this item comprised the following amounts: 
Interest on loans 
Interest on deposits 
Interest on fixed-income securities 
Total 1985 
658 568 671 
101 954 548 
64 928 737 
825 451 956 1984 
653 326 872 
86 700 695 
63 259 937 
803 287 504 
15. Levy 
The ECSC is authorized under the Treaty to impose a levy on coal and steel produced by under­
takings in the Community. The calculation is based on the Community average values of the products 
concerned. The levy rate has been 0,31 % since 1 January 1980. 
16. Fines 
This item comprises the revenue from fines imposed by the Commission in accordance with Articles 58 
and 60 of the ECSC Treaty. 
Some companies have appealed to the Court of Justice of the European Communities against fines. At 
31 March 1986, six appeals, a total of 3 558 994 ECU, were still awaiting judgment from the Court of 
Justice. 
In 1985 fines totalling 6 178 701 ECU were cancelled or reduced by the Court of Justice or the Com­
mission of the European Communities. This amount is included in the item 'Expenditure relating to 
fines, deposits and levies'. 
17. Other commitments 
(a) Loans granted 
At 31 December 1985 the Commission had granted but not yet paid over loans as follows: 
— loans from borrowed funds: 706 702 717 ECU 
(1984: 127 075 698 ECU), 
— loans from own funds: 21 049 638 ECU 
(1984: 10 910 093 ECU). 
(b) Commitments arising from forward transactions 
To cover borrowing operations leading to loans in different currencies (Swap operations), the 
ECSC committed itself to the forward purchase of currencies amounting to 109 635 479 ECU 
(1984: 138 522 541 ECU) and forward sales amounting to 114 998 310 ECU (1984: 144 702 514 
ECU). 
At 31 December 1985, the ECSC had brought forward securities to the value of 19 493 725 ECU 
(1984: 83 882 620 ECU).