PIMCO Floating Rate Income/PIMCO Floating Rate Strategy Funds
Notes to Financial Statements
January 31, 2009 (unaudited)
1. Organization and Significant Accounting Policies (continued)
protection and fair value of each credit derivative at January 31, 2009. Potential losses related to hybrid
instruments that have embedded credit derivatives are limited to the initial cost of investments.
(d) Investment Transactions and Investment Income
Investment transactions are accounted for on the trade date. Securities purchased and sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date. Realized gains and losses on
investments are determined on an identified cost basis. Interest income is recorded on an accrual basis. Discounts
or premiums on debt securities purchased are accreted or amortized to interest income over the lives of the
respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date.
Facility fees and other fees (such as origination fees) received by the Funds are amortized as income over the
expected term of the loan. Commitment fees received by the Funds relating to unfunded purchase commitments
are recorded as other fee income upon receipt.
(e) Federal Income Taxes
The Funds intend to distribute all of their taxable income and to comply with the other requirements of the U.S.
Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no
provision for U.S. federal income taxes is required.
(f) Dividends and Distributions — Common Stock
The Funds declare dividends from net investment income monthly to common shareholders. Distributions of net
realized capital gains, if any, are paid at least annually. The Funds record dividends and distributions to their
shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and
net realized capital gains are determined in accordanc