Examination of the Financial Statements of the Panama Canal Company and the Canal Zone Government for Fiscal Periods 1977, Transition Quarter, and 1976

The Panama Canal Treaty terminates all prior agreements between the United States and the Republic of Panama for the operation of the Panama Canal. When the treaty comes into force about October 1, 1979, the present organization consisting of the Panama Canal Company and the Canal Zone Government, now responsible for administering the Canal, will be superseded by a Panama Canal Commission supervised by a Board of U.S. and Panamanian nationals. Implementing U.S. legislation, subsequent to the new treaty, is still under development, and there are uncertainities as to the full financial impact that the treaty could have on the Canal organization. The financial statements have been prepared under the assumption that the Canal organization will continue to operate without material change in the scope of its operations.