2011 Annual Report - the solid group inc website

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12. REAL ESTATE INVENTORIES
This account is composed of:
2011 2010
Land and land development costs:
Land P 36,112,467 P 46,985,838
Land development costs 17,883,041 36,046,751
53,995,508 83,032,589
Allowance for impairment ( 2,022,800) ( 2,022,800 )
51,972,708 81,009,789
Property development costs -
Construction in progress
and development costs 1,623,808,064 1,246,993,041
P1,675,780,772 P 1,328,002,830
Land and land development costs pertain to cost of land and related improvements, held by
Starworld and LIIP, which are held for sale. Property development costs pertain to cost of
land used as a building site and the accumulated construction costs of the condominium
building project being developed by ZTC and Fil-Dragon which are also for sale.
The allowance for impairment was the amount recognized in 2005 pertaining to the estimated
cost of parcels of land and land development costs which may not be fully realized as a result
of the Group’s long-outstanding claims against the seller for the transfer of title to the name
of LIIP. There were no additional impairment losses recognized in 2011, 2010 and 2009.
Under its registration with the Board of Investments, Starworld shall develop
118 hectares of land in its development project located in Calamba Premiere International
Park (CPIP) in Bo. Prinza, Calamba City, Laguna. As of December 31, 2011, lot areas
totalling 83 hectares (65 hectares for Phase 1 and 18 hectares for Phase 2) were acquired and
fully developed.
The Group, through ZTC, has initiated the planning and construction of the
Tri Towers condominium building. The construction was started by SMC in 2005. The
accumulated construction costs (including cost of the land) were eventually transferred to
ZTC. As of December 31, 2011, 2010 and 2009, the construction of Tower 1, which started
in 2007, is fully completed. The construction of Tower 2 started in 2011 while the
construction of Tower 3 has not yet started as of December 31, 2011.
In October 2007, ZTC obtained its permit to sell that would allow pre-selling of
condominium units, and has entered into several construction contracts with various
contractors for the construction of the other towers (see Note 30.5). Advances made to
contractors are shown as part of the Other Current Assets account in the consolidated
statements of financial position (see Note 15).