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

- 11 -• PFRS 10, Consolidated Financial Statements (effective from January 1, 2013).This standard builds on existing principles of consolidation by identifyingthe concept of control as the determining factor in whether an entityshould be included within the consolidated financial statements. Thestandard also provides additional guidance to assist in determiningcontrol where this is difficult to assess.• PFRS 12, Disclosure of Interest in Other Entities (effective from January 1, 2013).This standard integrates and makes consistent the disclosure requirementsfor all forms of interests in other entities, including joint arrangements,associates, special purpose vehicles and unconsolidated structured entities.This also introduces new disclosure requirements about the risks to whichan entity is exposed from its involvement with structured entities.BDO Unibank Group is currently reviewing the impact of the aboveconsolidation standards on its financial statements in time for its adoption in2013.2.03 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 whenBDO Unibank 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. BDOUnibank Group’s consolidated financial statements comprise the accounts of the ParentBank and its subsidiaries as enumerated in Note 13.01, after the elimination of materialintercompany transactions. All significant intercompany balances and transactions withsubsidiaries, including income, expenses and dividends, are eliminated in full.Unrealized profits and losses from intercompany transactions that are recognized inassets are also eliminated in full. Intercompany losses that indicate impairment arerecognized in BDO Unibank Group financial statements.Business combinations arising from transfers of interests in entities that are under thecommon control of the shareholder that controls BDO Unibank Group are accountedfor under the pooling-of-interests method and reflected in the financial statements as ifthe business combination had occurred at the beginning of the earliest comparativeperiod presented, or if later, at the date that common control was established; for thispurpose, comparatives are restated. The resources and liabilities acquired arerecognized in BDO Unibank Group’s controlling shareholder’s financial statements atthe carrying amounts recognized previously. The components of equity of the acquiredentities are added to the same components within BDO Unibank Group equity.