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

- 78 -The fair values of government debt and quoted AFS securities (other debt securities andequity shares) have been determined directly by reference to published prices generatedin an active market. For unquoted AFS securities, the fair value is not reliablydeterminable either by reference to similar financial instruments or through valuationtechnique using the net present value of the future cash flows. Accordingly, unquotedAFS securities are carried at cost.Changes in AFS securities are presented below.BDO Unibank GroupParent Bank2011 2010 2011 2010Balance at beginning of year P 85,674 P 47,033 P 77,725 P 39,327Additions 400,320 487,648 397,304 485,044Disposals ( 399,954) ( 450,925) ( 396,247 ) ( 447,710 )Foreign currency revaluation 178 ( 1,803) 185 ( 1,793 )Unrealized fair value gains 846 3,020 1,096 1,951Impairment recovery - net 2,861 701 2,868 9069.03 Held-to-Maturity InvestmentsThe balance of this account is composed of the following:P 89,925 P 85,674 P 82,931 P 77,725BDO Unibank Group Parent BankNote 2011 2010 2011 2010Government debtsecurities P 83,240 P 90,514 P 75,312 P 82,202Other debt securities:Listed 9,625 13,035 9,625 12,681Not quoted 1,217 1,145 1,217 1,09894,082 104,694 86,154 95,981Allowance forimpairment 14 ( 412) ( 453) ( 412) ( 412 )P 93,670 P 104,241 P 85,742 P 95,569On October 6, 2010, the BDO Unibank Group participated in the Global BondExchange offered by the ROP wherein certain U.S. dollar denominated governmentbonds due between 2011 to 2016 were exchanged by the Parent Bank for newly issuedU.S. dollar denominated global bonds due 2021. The BDO Unibank Group and ParentBank exchanged Republic of Philippine (ROP) bonds with face value ofUS$111.5 million and US$75.4 million, respectively. The fair value of the Benchmarkbonds received by BDO Unibank Group and Parent Bank amounted to US$134.6million and US$94.1 million, respectively, resulting to a gain of US$18.8 million or P824and US$16.6 million or P728, respectively, to be deferred and amortized over theremaining life of the Benchmark bonds. The total amount of gain amortized by BDOUnibank Group and Parent Bank amounted to US$1.73 million or P73 and US$1.47million or P64 in 2011, respectively, and US$0.41 million or P18 and US$0.36 million orP16 in 2010, respectively, shown as part of Trading Gains – net presented under OtherOperating Income in the statements of income.