2011 Annual Report Financial Supplements - BDO

NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated)Parent BankLeasehold Furniture,Rights and Fixtures andLand Buildings Improvements Equipment TotalBalance at January 1, 2010,net of accumulateddepreciation andamortization P 4,780 P 3,858 P 1,322 P 3,098 P 13,058Additions 89 564 447 1,100 2,200Disposals ( 15) ( 15) ( 6) ( 59) ( 95)Reclassifications 225 252 5 - 482Depreciation and amortizationcharges for the year - ( 229)( 412)( 889)( 1,530)Balance at December 31,2010, net of accumulateddepreciation andamortization P 5,079 P 4,430 P 1,356 P 3,250 P 14,115Under BSP rules, investments in premises, furniture, fixtures and equipment should not exceed50% of a bank’s unimpaired capital. As of December 31, 2011 and 2010, the BDO UnibankGroup has complied with this requirement.12. INVESTMENT PROPERTIESInvestment properties include land and buildings held for capital appreciation and for rental.Income earned from investment properties under rental arrangements amounted to P68 andP62 in 2011 and P81 and P78 in 2010 and are presented as part of Income from assetsacquired under other Operating Income in the BDO Unibank Group and Parent Bankfinancial statements, respectively (see Note 22). Direct expenses incurred from theseproperties amounted to P45 and P17 in 2011 and P32 and P22 in 2010 in the BDO UnibankGroup and Parent Bank financial statements, respectively.The gross carrying amounts and accumulated depreciation and impairment at the beginningand end of 2011 and 2010 are shown below.BDO Unibank GroupLand Buildings TotalDecember 31, 2011Cost P 10,231 P 3,839 P 14,070Accumulated depreciation - ( 1,658) ( 1,658)Allowance for impairment(see Note 14) ( 2,206) ( 69) ( 2,275)Net carrying amount P 8,025 P 2,112 P 10,137December 31, 2010Cost P 11,342 P 4,077 P 15,419Accumulated depreciation - ( 1,500) ( 1,500)Allowance for impairment(see Note 14) ( 1,765) ( 175) ( 1,940)Net carrying amount P 9,577 P 2,402 P 11,979