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

- 19 -Investment properties are derecognized upon disposal or when permanently withdrawnfrom use and no future economic benefit is expected from their disposal. Any gain orloss on the retirement or disposal of an investment property is recognized in profit orloss in the year of retirement or disposal.2.10 Real Properties for Development and SaleReal properties for development and sale consist of subdivision land for sale anddevelopment, and land acquired for home building, home development, and other typesof real estate development. These are carried at the lower of aggregate cost and netrealizable value (NRV). Costs include acquisition costs and costs incurred fordevelopment, improvement and construction of subdivision land. NRV is the sellingprice less estimated cost to complete, commissions and other marketing costs.Land acquired for home building, home development and other types of real estatedevelopment is also carried at the lower of aggregate cost and NRV. Cost includeacquisition costs and, once land development commences, the cost of these properties,including development costs incurred, will be classified to Real Properties forDevelopment and Sale.2.11 Equity InvestmentsIn the BDO Unibank Group’s financial statements, investments in associates areaccounted for under the equity method of accounting and are initially recognized at cost(see Note 2.24).The BDO Unibank Group’s share of its associates’ post-acquisition profits or losses isrecognized in profit or loss, and its share of post-acquisition movements in reserves isrecognized in reserves. The cumulative post-acquisition movements are adjustedagainst the carrying amount of the investment. When BDO Unibank Group’s share oflosses in an associate equals or exceeds its interest in the associate, including any otherunsecured receivables, BDO Unibank Group does not recognize further losses, unless ithas incurred obligations or made payments on behalf of the associate.Unrealized gains on transactions between BDO Unibank Group and its associates areeliminated to the extent of BDO Unibank Group’s interest in the associates.Unrealized losses are also eliminated unless the transaction provides evidence of animpairment of the asset transferred. Accounting policies have been changed wherenecessary to ensure consistency with the policies adopted by BDO Unibank Group.Associates are all entities over which BDO Unibank Group has significant influence butnot control, generally accompanying a shareholding of between 20% and 50% of thevoting rights.In the Parent Bank’s financial statements, the investments in subsidiaries and associatesare carried at cost, less any impairment in value.