Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 9 -(ii) PAS 12 (Amendment), Income Taxes – Deferred Tax: Recovery of Underlying Assets(effective from January 1, 2012). The amendment provides an exception to theexisting principle in PAS 12 that recovery of the carrying amount of investmentproperty measured at fair value under PAS 40, Investment Property, will be ornormally be through sale. The amendment introduces a rebuttable presumptionthat the measurement of a deferred tax liability or asset on an investmentproperty measured at fair value should reflect the tax consequence of recoveringthe carrying amount entirely through sale. The presumption is rebutted fordepreciable investment property (e.g., building) measured at fair value that isheld with an objective to consume substantially the economic benefitsembodied in the asset over time, rather than through sale. As a result of theamendment, Standing Interpretation Committee (SIC) 21 Income Taxes –Recovery of Revalued Non-Depreciable Assets, is accordingly withdrawn. Themanagement does not expect that this amendment will impact the financialstatements since BDO Unibank Group does not measure its investmentproperty at fair value.(iii) PAS 19 (Amendment), Employee Benefits (effective from January 1, 2013). Theamendment made a number of changes as part of the improvements throughoutthe standard. The main changes relate to defined benefit plans as follows:• eliminates the corridor approach under the existing guidance of PAS 19and requires an entity to recognize all gains and losses arising in thereporting period;• streamlines the presentation of changes in plan assets and liabilitiesresulting in the disaggregation of changes into three main components ofservice costs, net interest on net defined benefit obligation or asset, andremeasurement; and,• enhances disclosure requirements, including information about thecharacteristics of defined benefit plans and the risks that entities areexposed to through participation in them.Currently, BDO Unibank Group is using the corridor approach. Theunrecognized actuarial losses of BDO Unibank Group and the Parent Bank asof December 31, 2011 amounted to P4,520 and P4,252, respectively, whichwill be retrospectively recognized as loss in other comprehensive income in2013.(iv) PFRS 7 (Amendment), Financial Instruments: Disclosures – Transfers of FinancialAssets (effective from July 1, 2011). The amendment requires additionaldisclosures that will allow users of financial statements to understand therelationship between transferred financial assets that are not derecognized intheir entirety and the associated liabilities; and, to evaluate the nature of, and riskassociated with any continuing involvement of the reporting entity in financialassets that are derecognized in their entirety. BDO Unibank Group does notusually enter into this type of arrangement with regard to transfer of financialasset, hence, the amendment may not significantly change BDO UnibankGroup’s disclosures in its financial statements.