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

- 30 -Foreign exchange gains and losses resulting from the settlement of such transactionsand from the translation at period-end exchange rates of monetary assets and liabilitiesdenominated in foreign currencies are recognized in profit or loss.The operating results and financial position of foreign subsidiaries and an overseasbranch, which are measured using the US dollar or Euro and Hong Kong dollars,respectively, are translated to Philippine pesos, the BDO Unibank Group’s functionalcurrency, as follows:a. Assets and liabilities are translated at the closing rate at the end of the reportingperiod;b. Income and expenses are translated at the monthly average exchange rates (unlessthis average is not reasonable approximation of the cumulative effect of the ratesprevailing on the transaction dates, in which case income and expenses aretranslated at the dates of the transactions), except for FCDU which uses the bookrate or the previous month-end Philippine Dealing System closing rate in translatingincome and expenses and the overseas branch which used the month-endPhilippine Dealing System closing rate in translating income and expenses; and,c. All resulting exchange differences are recognized as a separate component of othercomprehensive income.On consolidation, exchange differences arising from the translation of the netinvestment in foreign subsidiaries and an overseas branch is recognized to othercomprehensive income as part of Accumulated Translation Adjustment. When aforeign operation is sold, such exchange differences are recognized in profit or loss.The translation of the financial statements into Philippine peso should not be construedas a representation that the US dollar, Euro or Hong Kong dollar amounts could beconverted into Philippine peso amounts at the translation rates or at any other rates ofexchange.2.26 Employee BenefitsPost-employment benefits are provided to employees through a defined benefit plan, aswell as defined contribution plan.(a) Post-employment Defined BenefitA defined benefit plan is a post-employment plan that defines an amount ofpost-employment benefit that an employee will receive on retirement, usuallydependent on one or more factors such as age, years of service and expected rateof salary increases. The legal obligation for any benefits from this kind ofpost-employment plan remains with BDO Unibank Group, even if plan assets forfunding the defined benefit plan have been acquired. Plan assets may includeassets specifically designated to a long-term benefit fund, as well as qualifyinginsurance policies. BDO Unibank Group’s defined benefit post-employment plancovers all regular full-time employees. The post-employment plan is tax-qualified,noncontributory and administered by a trustee.