2 Basis of preparation and changes to accounting policies

2.1 Basis of preparation

These condensed consolidated interim financial statements as at June 30, 2026 have been prepared in accordance with IAS 34 of the IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB), as adopted by the European Union.

2.2 Accounting policies

The accounting policies, presentation and methods of computation are consistent with those applied in the preparation of FMO’s consolidated annual financial statements for the year ended December 31, 2025. The condensed consolidated interim financial statements do not include all of the information required in a complete set of financial statements prepared in line with IFRS as endorsed by the EU. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in FMO's financial position and performance since the last annual financial statements. These condensed consolidated interim financial statements should be read in conjunction with FMO’s consolidated annual financial statements as at December 31, 2025.

2.3 Group accounting and consolidation

The company accounts of FMO and the company accounts of the subsidiaries and structured entities Asia Participations B.V., Equis DFI Feeder L.P., FMO Investment Management B.V., FMO Representative Office LAC Limitada, the FMO Ventures Program, and the Land Use Facility (LUF), within the Dutch Fund for Climate and Development (DFCD) program are included in these consolidated financial statements. FMO has a 63 percent holding in Equis DFI Feeder L.P. The remaining entities, except for the FMO Ventures Program and LUF, are 100 percent owned by FMO.

FMO Representative Office LAC Limitada is FMO's representative entity in Costa Rica. The consolidation of this entity does not have a material impact on FMO's statement of financial position. Asia Participations B.V. and Equis DFI Feeder L.P. provide equity capital to companies in developing economies. FMO Investment Management B.V. carries out portfolio management activities for third party investment funds, which are invested in FMO’s transactions in emerging markets and developing economies.

The FMO Ventures Program and the LUF are programs involving FMO, the Dutch Government, and European Commission (EC). The FMO Ventures Program facilitates investments in young startups and scale-ups, while LUF facilitates investments specifically in sectors relating to agroforestry, sustainable land use, and climate-resilient food production. These programs are structured entities that have been designed so that voting or similar rights are not a dominant factor in deciding who controls the entity, and relevant activities are directed by means of contractual arrangements. FMO has control over direct relevant investment decisions and returns of these programs. Therefore, FMO has consolidated the FMO Ventures program and LUF in FMO’s statement of financial position.

2.4 Foreign currency translation

The condensed consolidated interim financial statements are stated in euros, which is the presentation and functional currency of FMO. All amounts are denominated in thousands of euros unless stated otherwise. In accordance with IAS 21, foreign currency transactions are translated to euro at the exchange rate prevailing on the date of the transaction. At the statement of financial position date, monetary assets and liabilities are reported using the closing exchange rate. Non-monetary assets that are not measured at cost denominated in foreign currencies are reported using the exchange rate that existed when fair values were determined.

2.5 Adoption of new standards, interpretations and amendments

The following amendments to IFRS Accounting Standards have been issued by the IASB, endorsed by the EU and are effective as of 1 January 2026:

  • Amendments to the Classification and Measurement of Financial Instruments—Amendments to IFRS 9 and IFRS 7;

  • Annual Improvements to IFRS Accounting Standards—Volume 11; and

  • Contracts Referencing Nature-dependent Electricity—Amendments to IFRS 9 and IFRS 7.

These amendments do not have significant impact on FMO's financial statements.

2.6 Standards issued but not yet effective

The IASB has issued new standards and amendments to existing standards, some of which have not yet been endorsed by the EU. These standards and amendments are effective for annual reporting periods beginning on or after 1 January 2027, except where noted otherwise. FMO does not intend to early adopt any standards or amendments that have been endorsed by the EU.

The new standards relevant to FMO’s assessment are as follows:

  • IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024 and endorsed by the EU). FMO’s assessment is set out below.

  • IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 9 May 2024). IFRS 19 permits eligible subsidiaries to apply reduced disclosure requirements. As FMO has public accountability, it is not eligible to apply IFRS 19. Accordingly, the standard is not expected to have an impact on FMO.

  • IFRS 20 Regulatory Assets and Regulatory Liabilities (issued on 27 May 2026 and effective for annual reporting periods beginning on or after 1 January 2029). FMO is assessing the impact of the standard. Based on the preliminary assessment, no impact is expected.

The amendments to existing standards relevant to FMO’s assessment are as follows:

  • Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency (issued on 13 November 2025). The amendments clarify the translation requirements when financial statements are translated from a non-hyperinflationary functional currency into a hyperinflationary presentation currency. No significant impact is expected on FMO’s financial statements.

  • Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures (issued on 21 August 2025). As noted above, FMO is not eligible to apply IFRS 19 and the amendments are therefore not expected to have an impact on FMO.

  • Amendments to IAS 28 Investments in Associates and Joint Ventures: Amendments to the Fair Value Option for Investments in Associates and Joint Ventures (issued on 26 June 2026). The amendments clarify the eligibility criteria for applying the fair value option to investments in associates and joint ventures. FMO is assessing the impact of the amendments. Based on the preliminary assessment, no significant impact is expected.

IFRS 18 Presentation and Disclosures in Financial Statements

IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for periods beginning on or after 1 January 2027. The new accounting standard introduces the following new requirements:

  • Entities are required to classify income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations, and income tax categories. Entities are also required to present a newly defined "operating profit" subtotal, however net profit will not change.

  • Management defined performance measures (MPM) are to be identified and disclosed in a single note in the financial statements.

  • The guidance on grouping of information in the financial statements has been enhanced.

The amendments are expected to impact presentation and disclosure requirements for the consolidated financial statements, including the consolidated statement of profit or loss, however, it will not materially impact the results. The assessment performed as of the date of this report indicates that the impact on FMO is limited to the following:

  • Rearrangement of the profit or loss statement to clearly present the newly applicable operating, investing, financing and income tax categories; the discontinued operations category is not currently applicable.

  • Reclassification of interest on lease from the net interest subtotal to the financing section of the profit or loss; and

  • Establishing the non-ratio 'Financial Accounting Alternative Performance Measures' (APMs) management presents in the interim and annual reports that qualify for recognition as MPMs and recognizing the identified MPMs in a single note that forms part of the financial statements. The identified APMs that will form part of FMO's (condensed) consolidated interim and annual financial statements starting in the 2027 condensed consolidated interim financial statements are 'Regular income' and 'Regular result before tax'.

2.7 Estimates and assumptions

In preparing the condensed consolidated interim financial statements in conformity with IAS 34, management is required to make estimates and assumptions that affect reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. The same methods for making estimates and assumptions have been followed in the condensed consolidated interim financial statements as were applied in the preparation of FMO’s consolidated financial statements as at December 31, 2025.

2.8 Segment reporting

The operating segments are reported in a manner consistent with internal reporting to FMO’s chief operating decision maker. The chief operating decision maker who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Management Board. FMO presents its operating segments based on servicing unit.

In these condensed consolidated interim financial statements, the segment information note has been revised and enhanced to align more closely with the manner in the basis in which management organizes and steers the operating segments. Accordingly, certain prior-period comparative amounts and disclosures have been revised and, therefore, do not fully agree to those presented in the 2025 condensed consolidated interim financial statements. Reference is made to the Segment Information note for more details on operating segments.

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