NOTES TO FINANCIAL STATEMENTS
MAY 31, 1996 (UNAUDITED) THE SPAIN FUND
NOTE A: SIGNIFICANT ACCOUNTING POLICIES
The Spain Fund, (the "Fund") was incorporated in the state of Maryland on June 30, 1987 as a non-diversified,
closed-end management investment company.
The financial statements include the accounts of the Fund and its wholly-owned subsidiary (Spain Shares
Investments Maryland B.V.). The Fund is currently in the process of dissolving and liquidating its wholly-owned
subsidiary. The following is a summary of significant accounting policies followed by the Fund.
1. SECURITY VALUATION Investments are stated at value. Investments for which market quotations are
readily available are valued at the closing price on the day of valuation or at the last bid price quoted on such day
if no such closing price is available. If there are no quotations available for the day of valuation, the last available
closing price will be used. Securities for which market quotations are not readily available are valued at fair value
as determined in good faith by the Board of Directors. Such securities have a value of $4,055,244 at May 31,
1996. In determining fair value, consideration is given to cost, operating and other financial data. Securities which
mature in 60 days or less are valued at amortized cost, which approximates market value, unless this method
does not represent fair value. Foreign security and currency transactions may involve certain considerations and
risks not normally associated with those of domestic origin as a result of, among others, the possibility of political
and economic instability and the level of government supervision and regulation of foreign securities markets.
2. CURRENCY TRANSLATION Assets and liabilities denominated in Spanish pesetas are translated into U.S.
dollars at the mean of the quoted bid and asked price of the peseta against the U.S. dollar. Purchases and sales
of portfolio securities are translated at the rates of exchange prevailing when such securities we