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

- 75 -9.01 Financial Assets at FVTPLThis account is composed of the following:BDO Unibank Group Parent Bank2011 2010 2011 2010Derivative financial assets P 3,739 P 5,110 P 1,890 P 3,379Government bonds 949 1,640 518 866Other debt securities 58 610 - 1024,746 7,360 2,408 4,347Equity securities - quoted 77 12 - -P 4,823 P 7,372 P 2,408 P 4,347All financial assets at FVTPL are held for trading. For government bonds and otherdebt securities, the amounts presented have been determined directly by reference topublished prices quoted in an active market. On the other hand, the fair value ofderivative financial assets is determined through valuation technique using net presentvalue of future cash flows method. BDO Unibank Group recognized total fair valuegain (loss) on financial assets at FVTPL amounting to P378, (P131) and P1,814 in 2011,2010 and 2009, respectively, in the BDO Unibank Group financial statements andP359, (P270) and P1,778 in 2011, 2010 and 2009, respectively, in the Parent Bankfinancial statements. These are included as part of Trading gain – net under OtherOperating Income in the statements of income (see Note 22).Foreign currency-denominated securities amounted to P2,071 and P3,743 as ofDecember 31, 2011 and 2010, respectively, in the BDO Unibank Group financialstatements and P1,864 and P3,203 as of December 31, 2011 and 2010, respectively, inthe Parent Bank financial statements.Derivative instruments used by BDO Unibank Group include foreign currency andinterest rate forwards/futures, foreign currency and interest rate swaps. Also in 2007,derivatives included embedded credit default swaps bifurcated from CLNs or creditlinkeddeposits (CLDs) (which were reclassified to Loans and Other Receivablestogether with their host contracts in 2008). Foreign currency and interest rateforwards/futures represent commitments to purchase/sell or are contractual obligationsto receive or pay a new amount based on changes in currency rates or interest rates on afuture date at a specified price. Foreign currency and interest rate swaps arecommitments to exchange one set of cash flows for another. The credit default swapsrepresent commitment of the counterparty to swap the note and deposit with highyielding securities upon the occurrence of the reference event by the reference entity.