We assessed the potential impact on the 2018 accounts of the United Kingdom’s withdrawal from the European Union VII. On 29 March 2017, the United Kingdom (UK) formally notified the European Council of its intention to leave the EU. On 10 April 2019, the European Council agreed to extend the deadline for the UK’s departure date ( ( 5 ) ) for as long as necessary but, in any event, until no later than 31 October 2019. According to the Council’s decision, the UK is due to leave the EU on the first day of the month following the completion of the ratification procedures or on 1 November 2019, whichever is earlier. The United Kingdom will remain a Member State until the new withdrawal date, with full rights and obligations under Article 50 of the Treaty on European Union, and has the right to revoke its notification at any time. VIII. As indicated in paragraph II, the 2018 EU consolidated accounts have been prepared to reflect the EU’s financial position as at 31 December 2018 and the 2018 results, cash flows and changes in net assets. The 2018 EU consolidated accounts reflect the state of the negotiations as of 31 December 2018. On that date, and up until the date we completed our audit work, the UK still was an EU Member State. IX. We have not identified any events relating to the withdrawal process that would require adjustments according to the international accounting standard on events after the reporting date ( ( 6 ) ). X. We will continue to assess the potential impact on the EU consolidated accounts of the United Kingdom’s withdrawal from the European Union. Future EU consolidated accounts will need to reflect the state or outcome of the withdrawal process. As of the date we completed our audit of the 2018 accounts, it was not yet known whether the UK would actually leave the EU and, if so, on what date and on what terms. XI. Based on this current situation, there is no financial impact to report in the 2018 EU consolidated annual accounts, and we conclude that the accounts as at 31 December 2018 correctly reflect the withdrawal process at that date. We assessed the liability for pension and other employee benefits XII. The EU balance sheet includes a liability for pension and other employee benefits amounting to 80,5 billion euros at the end of 2018. This is one of the most significant liabilities in the balance sheet, accounting for more than a third of the total 2018 liabilities of 235,9 billion euros XIII. Most of this liability for pension and other employee benefits (70,0 billion euros) relates to the Pension Scheme of Officials and Other Servants of the European Union (PSEO). The liability recorded in the accounts reflects the amount which would have been included in a pension fund had one been set up to pay existing retirement pension obligations ( ( 7 ) ). In addition to retirement pensions, it covers invalidity pensions and pensions paid to widows or orphans of EU staff. The benefits paid under the pension scheme are charged to the EU budget. Member States jointly guarantee the payment of the benefits, and officials contribute one third of the cost of financing the scheme. Eurostat calculates this liability on behalf of the Commission’s accounting officer, using the parameters assessed by the Commission’s actuarial advisors. XIV. The second most significant part of the liability for pension and other employee benefits (8,7 billion euros) is the EU’s estimated liability towards the Joint Sickness Insurance Scheme (JSIS). This liability relates to EU staff members’ healthcare costs, which must be paid during post-activity periods (net of their contributions). XV. As part of our audit, we assessed, for the pension liability, the actuarial assumptions made and the resulting valuation. We based this evaluation on work done by external actuarial experts to produce a study on the pension and JSIS liabilities. We checked the numerical data, the actuarial parameters and the calculation of the liability, as well as the presentation in the consolidated balance sheet and the notes to the consolidated financial statements. As stated in note 2.9 to the consolidated financial statements, the Commission has continued to work towards strengthening its processes for calculating the employee benefits liability, which we will keep under review. We assessed significant year-end estimates presented in the accounts XVI. At year-end 2018, the estimated value of eligible expenses incurred by beneficiaries but not yet reported was 99,8 billion euros (year-end 2017: 100,9 billion euros). These amounts were recorded as accrued expenses ( ( 8 ) ). XVII. At year-end 2018, the estimated amount unused by the financial instruments under shared management and aid schemes recognised in the EU accounts was 6,5 billion euros (year-end 2017: 4,7 billion euros), shown in the balance sheet as ‘Other advances to Member States’. XVIII. In order to assess these year-end estimations, we examined the system the Commission had set up for the cut-off calculations and ensured its correctness and completeness in the Directorates-General where most payments are made. During our audit work on the sample of invoices and pre-financing payments, we examined the relevant cut-off calculations in order to address the risk of accruals having been misstated. We sought additional clarification from the Commission’s accounting services on the general methodology for establishing these estimates. XIX. We conclude that the estimate of the overall amount of accrued charges and other advances to Member States stated in the consolidated balance sheet is fair.