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

- 20 -2.12 Premises, Furniture, Fixtures and EquipmentPremises, furniture, fixtures and equipment are carried at acquisition cost lessaccumulated depreciation and amortization and any impairment in value. Propertyitems of the former EPCIB stated at appraised values were included in BDO UnibankGroup balances at their deemed costs at date of transition to PFRS on January 1, 2005.The revaluation increment is credited to Revaluation Increment account in the Equitysection, net of applicable deferred tax.The cost of an asset comprises its purchase price and directly attributable costs ofbringing the asset to working condition for its intended use. Expenditures foradditions, major improvements and renewals are capitalized; expenditures for repairsand maintenance are charged to expense as incurred. When assets are sold, retired orotherwise disposed of, their cost and related accumulated depreciation and amortizationand impairment losses are removed from the accounts and any resulting gain or loss isreflected in profit or loss for the period.Depreciation is computed on a straight-line basis over the estimated useful lives of thedepreciable assets as follows:BuildingsFurniture, fixtures and equipment10 - 50 years3 - 5 yearsLeasehold rights and improvements are amortized over the terms of the leases or theestimated useful lives of the improvements, whichever is shorter.An asset’s carrying amount is written down immediately to its recoverable amount if theasset’s carrying amount is greater than its estimated recoverable amount (see Note 2.24).The residual values and estimated useful lives of premises, furniture, fixtures andequipment are reviewed and adjusted, if appropriate, at the end of each reporting period.An item of premises, furniture, fixtures and equipment is derecognized upon disposal orwhen no future economic benefits are expected to arise from the continued use of theasset. Any gain or loss arising on derecognition of the asset (calculated as the differencebetween the net disposal proceeds and the carrying amount of the item) is included inprofit or loss in the period the item is derecognized.2.13 Business CombinationExcept as indicated otherwise, business acquisitions are accounted for using theacquisition method of accounting.Goodwill acquired in a business combination is initially measured at cost being theexcess of the cost of a business combination over BDO Unibank Group’s interest inthe net fair value of the identifiable assets, liabilities and contingent liabilities.Subsequent to initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. Goodwill is reviewed for impairment annually or more frequently ifevents or changes in circumstances indicate that the carrying value may be impaired(see Note 2.24).