2011 Annual Report Financial Supplements - BDO

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(ii) Philippine Interpretation IFRIC 14 (Amendment), Prepayment of a Minimum FundingRequirement (effective from January 1, 2011). This interpretation addresses unintendedconsequences that can arise from the previous requirements when an entity prepaysfuture contributions into a defined benefit pension plan. It sets out guidance on whenan entity recognizes an asset in relation to a surplus for defined benefit plans based onPAS 19, Employee Benefits, that are subject to a minimum funding requirement. TheBDO Unibank Group is not subject to minimum funding requirement, hence, theadoption of the revised standard has no material effect on its financial statements.(iii) Philippine Interpretation IFRIC 19, Extinguishing Financial Liabilities with EquityInstruments (effective from July 1, 2010). This interpretation clarifies the accountingwhen an entity renegotiates the terms of a financial liability through issuance of equityinstruments to extinguish all or part of the financial liability. These transactions aresometimes referred to as “debt for equity” exchanges or swaps. The interpretationrequires the debtor to account for a financial liability which is extinguished by equityinstruments as follows:the issue of equity instruments to a creditor to extinguish all or part of a financialliability is consideration paid in accordance with PAS 39, Financial Instruments:Recognition and Measurement;the entity measures the equity instruments issued at fair value, unless this cannotbe reliably measured;if the fair value of the equity instruments cannot be reliably measured, then thefair value of the financial liability extinguished is used; and,the difference between the carrying amount of the financial liability extinguishedand the consideration paid is recognized in profit or loss.The adoption of the interpretation did not have a material effect on BDO UnibankGroup’s financial statements as it did not extinguish financial liabilities through equityswap during the year.(iv) 2010 Annual Improvements to PFRS. The FRSC has adopted the 2010 Improvements toPFRS. Most of these amendments became effective for annual periods beginning onor after July 1, 2010 or January 1, 2011. Among those improvements, only thefollowing amendments which are effective from July 1, 2010 were identified to berelevant to BDO Unibank Group’s financial statements but which did not have anymaterial impact on its financial statements:PAS 1 (Amendment), Presentation of Financial Statements: Clarification of Statement ofChanges in Equity (effective from July 1, 2010). The amendment clarifies that, foreach component of equity, an entity may present an analysis of othercomprehensive income either in the statement of changes in equity or in thenotes to the financial statements. As the BDO Unibank Group’s othercomprehensive income only includes fair value changes on Available-for-sale(AFS) securities, revaluation of certain items of bank premises, furniture, fixturesand equipment, and cumulative translation adjustment, the BDO UnibankGroup has elected to continue presenting each item of other comprehensiveincome in the statement of changes in equity.www.bdo.com.ph 21
NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated) Consolidated and Separate Financial Statements(effective from July 1, 2010). This amendment clarifies that the consequentialamendments made to PAS 21, The Effect of Changes in Foreign Exchange Rates,PAS 28, Investment in Associate, and, PAS 31, Investment in Joint Ventures, arising fromthe PAS 27 (2008) amendments apply prospectively, to be consistent with therelated PAS 27 transition requirements. The amendment has no impact on BDOUnibank Group’s financial statements.PAS 34 (Amendment), Interim Financial Reporting – Significant Event and Transactions(effective from January 1, 2011). The amendment provides further guidance toillustrate how to apply disclosure principles under PAS 34 for significant eventsand transactions to improve interim financial reporting. It requires additionaldisclosure covering significant changes to fair value measurement andclassification of financial instruments, and to update relevant information from themost recent annual report. This amendment has no significant effect on thefinancial statements since the BDO Unibank Group already provides adequateinformation in its financial statements in compliance with the disclosurerequirements. PFRS 3 (Amendments), Business Combinations (effective from July 1, 2010).The amendment clarifies that contingent consideration arrangement and balancesarising from business combinations with acquisition dates prior to the entity’s dateof adoption of PFRS 3 (Revised 2008) shall not be adjusted on the adoption date.It also provides guidance on the subsequent accounting for such balances.It further clarifies that the choice of measuring non-controlling interest (NCI) atfair value or at the proportionate share in the recognized amounts of an acquiree’sidentifiable net assets, applies only to instruments that represent ownershipinterests and entitle their holders to a proportionate share of the acquiree’s netassets in the event of liquidation. All other components of NCI are measured atfair value unless PFRS requires another measurement basis.This amendment also clarifies accounting for all share-based payment transactionsthat are part of a business combination, including unreplaced and voluntaryreplaced share-based payment awards. Specifically, this provides guidance forsituations where the acquirer does not have an obligation to replace an award butreplaces an existing acquiree award that would otherwise have continuedunchanged after the acquisition, thus resulting to the accounting for these awardsbeing the same as for the awards that the acquirer is obliged to replace. Thisamendment has no significant effect on the BDO Unibank Group’s financialstatements since the manner of measuring NCI at the time of businesscombination is based on net identifiable assets and there are noshare-based payment transactions that are part of a business combination.
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 18 and 19: 1.02 Approval of Financial Statemen
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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