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

- 32 -(e)Executive Stock Option PlanBDO Unibank Group grants stock option plan to its senior officers (fromvice-president up) for their contribution to BDO Unibank Group’s performanceand attainment of team goals. The amount of stock option allocated to thequalified officers is based on the performance of the individual officers asdetermined by the management and is determined based on BDO UnibankGroup’s performance in the preceding year and amortized over five years startingfrom the date of the approval of the BOD. The number of officers qualified at thegrant date is regularly evaluated during the vesting period (at least annually) and theamount of stock option is decreased in case there are changes in the number ofqualified employees arising from resignation or disqualification. The annualamortization of stock option is included as part of Employee Benefits in profit orloss and the cumulative balance is shown as Common Stock Options in thestatement of changes in equity (nil in 2011 and 2010).(f)Compensated AbsencesCompensated absences are recognized for the number of paid leave days(including holiday entitlement) remaining at the end of reporting period. These areincluded in Other Liabilities account at the undiscounted amount that BDOUnibank Group expects to pay as a result of the unused entitlement.2.27 Income TaxesTax expense recognized in profit or loss comprise the sum of deferred tax and currenttax not recognized in other comprehensive income or directly in equity, if any.Current tax assets or liabilities comprise those claims from, or obligations to, fiscalauthorities relating to the current or prior reporting period, that are uncollected orunpaid at the end of the reporting period. They are calculated according to the tax ratesand tax laws applicable to the fiscal periods to which they relate, based on the taxableprofit for the period. All changes to current tax assets or liabilities are recognized as acomponent of tax expense in profit or loss.Deferred tax is provided, using the liability method, on temporary differences at the endof the reporting period between the tax base of assets and liabilities and their carryingamounts for financial reporting purposes. Under the liability method, with certainexceptions, deferred tax liabilities are recognized for all taxable temporary differencesand deferred tax assets are recognized for all deductible temporary differences and thecarryforward of unused tax losses and unused tax credits to the extent that it is probablethat taxable profit will be available against which the deferred tax asset can be utilized.The carrying amount of deferred tax assets is reviewed at the end of each reportingperiod and reduced to the extent that it is probable that sufficient taxable profit will beavailable to allow all or part of the deferred tax asset to be utilized.Deferred tax assets and liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled, based on tax rates andtax laws that have been enacted or substantively enacted at the end of each reportingperiod.