2011 Annual Report Financial Supplements - BDO

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1.02 Approval of Financial StatementsThe financial statements of the BDO Unibank Group and the Parent Bank for the year endedDecember 31, 2011 (with comparatives for the years ended December 31, 2010 and 2009) wereapproved and authorized for issue by the BOD on February 25, 2012.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe significant accounting policies that have been used in the preparation of these financialstatements are summarized in the succeeding pages. The policies have been consistentlyapplied to all the years presented, unless otherwise stated.2.01 Basis of Preparation of Consolidated Financial Statements(a) Statement of Compliance with Financial Reporting Standards in the Philippines for BanksThe consolidated financial statements of BDO Unibank Group and the financialstatements of the Parent Bank have been prepared in accordance with the FinancialReporting Standards in the Philippines (FRSP) for banks. FRSP and Philippine FinancialReporting Standards (PFRS) are similar except for the reclassification of the embeddedderivatives in credit-linked notes (CLNs) that are linked to Republic of the Philippines(ROP) bonds from fair value through profit or loss (FVTPL) to unquoted debt securitiesclassified as loans or UDSCL (included as part of Loans and Other Receivables), that areoutstanding as of the effective date of reclassification, which is permitted by the BSP forprudential reporting, and by the SEC for financial reporting.PFRSs are adopted by the Financial Reporting Standards Council (FRSC) from thepronouncements issued by the International Accounting Standards Board.The financial statements have been prepared using the measurement bases specified byPFRS for each type of assets, liabilities, income and expense. The measurement bases aremore fully described in the accounting policies that follow.The reconciliations and explanatory notes in the succeeding pages thereto describe thedifference on the statements of financial position under FRSP and PFRS.www.bdo.com.ph 17
NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated)(i) The reconciliations of the equity reported under FRSP to equity under PFRS as ofDecember 31 follow:BDO Unibank GroupParent Bank2011 2010 2011 2010Equity under FRSP P 96,962 P 88,732 P 89,583 P 82,549Prior year reconciling items 311 381 240 301Current year reconciling items:Amortization of premium/discount dueto change in effective interest rates ( 16) ( 222 ) ( 16 ) ( 209 )Amortization of negative fair value ofembedded derivatives on CLNsreclassified to loans and other receivables 9 - - -Reversal of net adjustments to equity due to:Unwinding of CLNs ( 80) - - -Unrealized mark-to-market gain (loss) onembedded derivatives on CLNsreclassified to loans and other receivables ( 202) 152 ( 202) 148( 289) ( 70 ) ( 218) ( 61 )Total adjustments to equity 22 311 22 240Equity under PFRS P 96,984 P 89,043 P 89,605 P 82,789(ii) Differences in the measurement of items in the statements of financial position as ofDecember 31 are summarized below.BDO Unibank Group2011FRSP Difference PFRSChanges in resources:Trading and investment securities P 188,418 (P 218) P 188,200Loans and other receivables 673,927 240 674,167P 862,345 P 862,367Total adjustments to equity P 222010FRSP Difference PFRSChanges in resources:Trading and investment securities P 197,287 P 41 P 197,328Loans and other receivables 566,021 270 566,291P 763,308 P 763,619Total adjustments to equity P 311
Page 7 and 8: REPORT OFINDEPENDENT AUDITORSReport
Page 9 and 10: STATEMENTS OFINCOMEFOR THE YEARS EN
Page 12: BALANCE AT JANUARY 1, 2009 P 23,020
Page 16 and 17: FOR THE YEARS ENDED DECEMBER 31, 20
Page 22 and 23: (ii) Philippine Interpretation IFRI
Page 24 and 25: PFRS 7 (Amendment), Financial Instr
Page 26 and 27: (v)PFRS 9, Financial Instruments: C
Page 28 and 29: BDO Unibank Group accounts for its
Page 30 and 31: Regular purchases and sales of fina
Page 32 and 33: Subsequent to initial recognition,
Page 34: Certain derivatives may be designat
Page 37 and 38: NOTES TOFINANCIAL STATEMENTSDECEMBE
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NOTES TOFINANCIAL STATEMENTSDECEMBE
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COMPANY HEADQUARTERSBDO Unibank, In
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2011 Annual Report Financial Supplements - BDO

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