Department Of Defense Agency Financial Report 2007 - Section 2: Financial Information Page 38
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82Department of Defense Agency Financial Report 2007
Section 2: Financial Information
50
Note 4. Investments and Related Interest
As of September 30
2007
Amortized
Amortization
Market Value
(amounts in millions)
Cost
(Premium)/
Investments, Net
Method
Disclosure
Discount
Intragovernmental Securities
Nonmarketable, Market- Based
Military Retirement Fund
$
222,030.5
See Below
$
(6,666.2)
$
215,364.3
$
212,242.6
Medicare Eligible Retiree Health Care Fund
110,206.3
See Below
(1,762.9)
108,443.4
106,692.8
US Army Corps of Engineers
4,058.5
See Below
(44.1)
4,014.4
4,043.1
Other Funds
2,039.0
See Below
(11.5)
2,027.5
2,040.2
Total Nonmarketable, Market-Based
338,334.3
(8,484.7)
329,849.6
325,018.7
Accrued Interest
3,861.4
3,861.4
3,861.4
Total Intragovernmental Securities
342,195.7
(8,484.7)
333,711.0
328,880.1
Other Investments
Total Other Investments
$
1,412.3
$
0.0
$
1,412.3
$
N/A
As of September 30
2006
Amortized
Amortization
Market Value
(amounts in millions)
Cost
(Premium)/
Investments, Net
Method
Disclosure
Discount
Intragovernmental Securities
Nonmarketable, Market-Based
Military Retirement Fund
$
213,248.6
See Below
$
(7,889.9)
$
205,358.7
$
202,876.7
Medicare Eligible Retiree Health Care Fund
85,730.6
See Below
(1,123.3)
84,607.3
82,962.7
US Army Corps of Engineers
3,632.9
See Below
(81.3)
3,551.6
3,519.5
Other Funds
1,911.1
See Below
(11.1)
1,900.0
1,900.6
Total Nonmarketable, Market-Based
304,523.2
(9,105.6)
295,417.6
291,259.5
Accrued Interest
3,843.6
3,843.6
3,843.6
Total Intragovernmental Securities
308,366.8
(9,105.6)
299,261.2
295,103.1
Other Investments
Total Other Investments
$
1,089.8
$
0.0
$
1,089.8
$
N/A
Amortization Method Used: Effective Interest
The market value of the non-marketable securities held by the Department fluctuates in tandem with the current selling price
of the equivalent marketable security on the open bond market. It is the intent of the Department to hold the investments to
maturity to prevent losses on the securities.
The Federal Government does not set aside assets to pay future benefits and expenditures associated with earmarked funds.
The cash generated from earmarked funds is deposited in the U.S. Treasury, which uses the cash for general Government
purposes. The U.S. Treasury securities are issued to the earmarked funds as evidence of its receipts. The U.S. Treasury
securities are an asset to the Department and a liability to the U.S. Treasury. Because the Department and the U.S. Treasury
are both parts of the Government, these assets and liabilities offset each other from the standpoint of the Government as a
whole. For this reason, they do not represent an asset or a liability in the U.S. Governmentwide financial statements.
The U.S. Treasury securities provide the Department with authority to draw upon the U.S. Treasury to make future benefit
payments or other expenditures. When the Department requires redemption of these securities, the Government finances the
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