2011 Annual Report Financial Supplements - BDO

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(v)PFRS 9, Financial Instruments: Classification and Measurement (effective fromJanuary 1, 2015). This is the first part of a new standard on classification andmeasurement of financial assets and financial liabilities that will replace PAS 39 in itsentirety. This chapter deals with two measurement categories for financial assets:amortized cost and fair value. All equity instruments will be measured at fair valuewhile debt instruments will be measured at amortized cost only if the entity is holdingit to collect contractual cash flows which represent payment of principal and interest.The accounting for embedded derivatives in host contracts that are financial assets issimplified by removing the requirement to consider whether or not they are closelyrelated, and, in most arrangement, does not require separation from the hostcontract.For liabilities, the standard retains most of the PAS 39 requirements which includeamortized-cost accounting for most financial liabilities, with bifurcation of embeddedderivatives. The main change is that, in case where the fair value option is taken forfinancial liabilities, the part of a fair value change due to an entity’s own credit risk isrecorded in other comprehensive income rather than in profit or loss, unless thiscreates an accounting mismatch.To date, other chapters of PFRS 9 dealing with impairment methodology and hedgeaccounting are still being completed.BDO Unibank Group does not expect to implement and adopt PFRS 9 until itseffective date or until all chapters of this new standard have been published. Inaddition, management is currently assessing the impact of PFRS 9 on the financialstatements of BDO Unibank Group.(vi) PFRS 13, Fair Value Measurement (effective from January 1, 2013). This standard aimsto improve consistency and reduce complexity by providing a precise definition offair value and a single source of fair value measurement and disclosure requirementsfor use across PFRS. The requirements do not extend the use of fair valueaccounting but provide guidance on how it should be applied where its use is alreadyrequired or permitted by other standards. BDO Unibank Group is yet to assess theimpact of this new standard.(vii) Consolidation Standards PAS 27 (Revised), Separate Financial Statements (effective from January 1, 2013).This revised standard now covers the requirements pertaining solely to separatefinancial statements after the relevant discussions on control and consolidatedfinancial statements have been transferred and included in the new PFRS 10.No new major changes relating to separate financial statements have beenintroduced as a result of the revision.PAS 28 (Revised), Investments in Associate and Joint Venture (effective fromJanuary 1, 2013). This revised standard includes the requirements for joint ventures,as well as associates, to be accounted for using equity method following theissuance of PFRS 11, Joint Arrangement.www.bdo.com.ph 25
NOTES TOFINANCIAL STATEMENTSDECEMBER 31, 2011, 2010 AND 2009(Amounts in Millions of Philippine Pesos, Except Per Share Data or As Indicated)PFRS 10, Consolidated Financial Statements (effective from January 1, 2013). Thisstandard builds on existing principles of consolidation by identifying theconcept of control as the determining factor in whether an entity should beincluded within the consolidated financial statements. The standard alsoprovides additional guidance to assist in determining control where this isdifficult to assess. PFRS 12, Disclosure of Interest in Other Entities (effective from January 1, 2013).This standard integrates and makes consistent the disclosure requirements forall forms of interests in other entities, including joint arrangements, associates,special purpose vehicles and unconsolidated structured entities. This alsointroduces new disclosure requirements about the risks to which an entity isexposed from its involvement with structured entities.BDO Unibank Group is currently reviewing the impact of the above consolidationstandards on its financial statements in time for its adoption in 2013.2.03 Presentation of Consolidated Financial StatementsThe consolidated financial statements are presented in accordance with PAS 1. BDOUnibank Group has elected to present the statement of comprehensive income in twostatements: a statement of income and a statement of comprehensive income.Two comparative periods are presented for the statements of financial position when BDOUnibank Group:(a) Applies an accounting policy retrospectively;(b) Makes a retrospective restatement of items in its financial statements; or,(c) Reclassifies items in the financial statements.2.04 Basis of ConsolidationBDO Unibank Group obtains and exercises control through voting rights. BDO UnibankGroup’s consolidated financial statements comprise the accounts of the Parent Bank and itssubsidiaries as enumerated in Note 13.01, after the elimination of material intercompanytransactions. All significant intercompany balances and transactions with subsidiaries,including income, expenses and dividends, are eliminated in full. Unrealized profits and lossesfrom intercompany transactions that are recognized in assets are also eliminated in full.Intercompany losses that indicate impairment are recognized in BDO Unibank Groupfinancial statements.Business combinations arising from transfers of interests in entities that are under thecommon control of the shareholder that controls BDO Unibank Group are accounted forunder the pooling-of-interests method and reflected in the financial statements as if thebusiness combination had occurred at the beginning of the earliest comparative periodpresented, or if later, at the date that common control was established; for this purpose,comparatives are restated. The resources and liabilities acquired are recognized in BDOUnibank Group’s controlling shareholder’s financial statements at the carrying amountsrecognized previously. The components of equity of the acquired entities are added to thesame components within BDO Unibank Group equity.The financial statements of subsidiaries are prepared for the same reporting period as theCompany, using consistent accounting principles.
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 22 and 23: (ii) Philippine Interpretation IFRI
Page 24 and 25: PFRS 7 (Amendment), Financial Instr
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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COMPANY HEADQUARTERSBDO Unibank, In
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2011 Annual Report Financial Supplements - BDO

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