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

- 41 -(e) Useful Lives of Premises, Furniture, Fixtures and Equipment and Investment PropertiesBDO Unibank Group estimates the useful lives of premises, furniture, fixtures andequipment and investment properties based on the period over which the assets areexpected to be available for use. The estimated useful lives of premises, furniture,fixtures and equipment and investment properties are reviewed periodically and areupdated if expectations differ from previous estimates due to physical wear and tear,technical or commercial obsolescence and legal or other limits on the use of theassets. The carrying amounts of premises, furniture, fixtures and equipment areanalyzed in Note 11. On the other hand, the carrying amounts of investmentproperties are analyzed in Note 12. Based on management’s assessment as atDecember 31, 2011 and 2010, there is no change in estimated useful lives ofpremises, furniture, fixtures and equipment and investment properties during theyear. Actual results, however, may vary due to changes in estimates brought aboutby changes in factors mentioned above.(f) Realizable Amount of Deferred Tax AssetsBDO Unibank Group reviews its deferred tax assets at the end of each reportingperiod and reduces the carrying amount to the extent that it is no longer probable thatsufficient taxable profit will be available to allow all or part of the deferred tax assetsto be utilized. The carrying value of deferred tax assets, which management assessedto be fully utilized within the next two to three years, as of December 31, 2011 and2010 is disclosed in Note 27.01.(g) Impairment of Non-financial AssetsExcept for intangible assets with indefinite useful lives, PFRS requires that animpairment review be performed when certain impairment indicators are present.BDO Unibank Group’s policy on estimating the impairment of non-financial assetsis discussed in detail in Note 2.24. Though management believes that theassumptions used in the estimation of fair values reflected in the financialstatements are appropriate and reasonable, significant changes in these assumptionsmay materially affect the assessment of recoverable values and any resultingimpairment loss could have a material adverse effect on the results of operations.Impairment losses recognized in profit or loss are disclosed in Note 14.(h) Retirement BenefitsThe determination of BDO Unibank Group’s obligation and cost of postemploymentand other retirement benefits is dependent on the selection of certainassumptions used by actuaries in calculating such amounts. Those assumptions aredescribed in Note 23 and include, among others, discount rates, expected rate ofreturn on plan assets and salary increase rates. In accordance with PFRS, actualresults that differ from the assumptions are accumulated and amortized over futureperiods and therefore, generally affect the recognized expense and recordedobligation in such future periods.