2011 Annual Report - BDO

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In 2010, the Bank has assessed two of its unquoted debt securities as impaired after consideringseveral factors that would result to a loss being incurred by the Bank. Impairment lossesrecognized in 2010 amounted to P16,425,761.In 2011, the Bank unwound the related securities, hence, the previously recognized allowancefor impairment was reversed as recovery from impairment in the amount of P76,716,633 in2011.8.02.01 Reclassification of CLNsIn 2008, pursuant to the amendments to PAS 39, the BSP issued Circular No. 628 – Guidelineson the Reclassification of Financial Assets Between Categories, in concurrence with the amendmentsto PAS 39, that allowed the reclassification of CLNs and other similar instruments that arelinked to ROPs to held to maturity investments or to loans for prudential reporting purposesof banks without bifurcating the embedded derivative. Consequently, effective August 29,2008, in accordance with such prudential reporting guidelines, the Bank reclassified the CLNslinked to ROPs amounting to P2,955,537,721 and their derivative components amounting toP113,628,498 to loans and receivables. Prior to the reclassification, the Bank presented thehost contracts under AFS securities account and the derivative components of these CLNsunder FVTPL account.On February 2, 2009, the SEC adopted the prudential regulations of the BSP under Circular628. Thus, banks which reclassified their financial instruments in accordance with BSPCircular 628 and other applicable and existing accounting standards shall be consideredcompliant with FRSP for banks as their financial reporting framework. The reconciliationsof equity, statement of financial position and profit or loss reported under PFRS to FRSP aredisclosed in Note 2.www.bdo.com.ph 89
NOTES TOFINANCIAL STATEMENTS9. BANK PREMISES, FURNITURE, FIXTURES AND EQUIPMENTThe gross carrying amounts and accumulated depreciation and amortization at the beginningand end of 2011 and 2010 are shown below.Furniture,Fixtures and LeaseholdEquipment Improvements TotalDecember 31, 2011Cost P 70,449,603 P 88,272,495 P 158,722,098Accumulated depreciationand amortization ( 47,462,849 ) ( 53,561,683 ) ( 101,024,532 )Net carrying amount P 22,986,754 P 34,710,812 P 57,697,566December 31, 2010Cost P 51,203,241 P 58,664,547 P 109,867,788Accumulated depreciationand amortization ( 39,133,418 ) ( 46,450,279 ) ( 85,583,697 )Net carrying amount P 12,069,823 P 12,214,268 P 24,284,091January 1, 2010Cost P 42,970,510 P 55,270,461 P 98,240,971Accumulated depreciationand amortization ( 32,252,359 ) ( 33,499,717 ) ( 65,752,076 )Net carrying amount P 10,718,151 P 21,770,744 P 32,488,895
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TABLE OFCONTENTS246Corporate Missio
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OUR COMMITMENTOur commitment to pro
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We remain steadfast in our vision a
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The Storywww.bdo.com.ph 9
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• Execution. If you are more of a
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ELIZABETH T. SY,Director59 years ol
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ADVISERSHarley T. Sy Ian T. Fish Ra
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CORPORATEGOVERNANCEBDO Private Bank
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CORPORATEGOVERNANCEChairman: Nestor
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Awardswww.bdo.com.ph 23
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Best Private Bankin the Philippines
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REPORT OFINDEPENDENT AUDITORSTHE BO
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STATEMENTS OFINCOMEFOR THE YEARS EN
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STATEMENTS OFCHANGES IN EQUITYFOR T
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www.bdo.com.ph 33
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2.01 Basis of Preparation of Financ
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2010Notes FRSP Difference PFRSChang
Page 40 and 41: Bank is not subject to minimum fund
Page 42 and 43: losses on AFS, can be reclassified
Page 44 and 45: i. only in rare circumstances and i
Page 46 and 47: together with the host contract wit
Page 48 and 49: If there is objective evidence that
Page 50 and 51: Bills payable are recognized initia
Page 52 and 53: In considering each possible relate
Page 54 and 55: translated into the Bank’s presen
Page 56 and 57: Deferred tax is provided, using the
Page 58 and 59: • The Risk Management Unit is res
Page 60 and 61: 2.15.02.01 Foreign Exchange RiskThe
Page 62 and 63: The following table shows the amoun
Page 64 and 65: 2011More MoreOne to than three than
Page 66 and 67: 2010More MoreOne to than three than
Page 68 and 69: The following table sets out the cr
Page 70 and 71: December 31, 2010Loans - Trading an
Page 72 and 73: The Bank’s lead regulator, the BS
Page 74 and 75: 3. CRITICAL ACCOUNTING ESTIMATES AN
Page 76 and 77: Details of impairment losses (recov
Page 78 and 79: payable) with repricing frequencies
Page 80 and 81: and any resulting impairment loss c
Page 82 and 83: from 0.0% to 9.13% per annum in 201
Page 84 and 85: 6.01 Collateralized Debt Obligation
Page 86 and 87: P9,483,508 in 2011 and 2010, respec
Page 88 and 89: this transaction amounted to P84,58
Page 92 and 93: A reconciliation of the carrying am
Page 94 and 95: Interest rates on deposit liabiliti
Page 96 and 97: 14. ACCRUED TAXES AND OTHER LIABILI
Page 98 and 99: 15.05 Surplus ReserveIn compliance
Page 100 and 101: Changes in the present value of the
Page 102 and 103: Assumptions rgarding future mortali
Page 104 and 105: 21. TAXES21.01 Current and Deferred
Page 106 and 107: The Bank is subject to MCIT which i
Page 108 and 109: The composition of the Bank’s AUM
Page 110 and 111: www.bdo.com.ph 109
Page 112: PRODUCTSAND SERVICESWEALTH ADVISORY
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2011 Annual Report - BDO

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