MORNBFI Vol. 1 - Planters Development Bank

§§ 4388Q.5 - 4394Q.211.12.31a. Fines of P2,000/day to be imposedon NBFIs for each violation, reckoned fromthe date the violation was committed up tothe date it was corrected; andb. Sanctions to be imposed onconcerned officers:(1) First offense – reprimand theofficers responsible for the violation; and(2) Subsequent offenses – suspensionof ninety (90) days without pay for officersresponsible for the violation(As amended by Circular Nos. 738 dated 11 October 2011, 670dated 18 November 2009, 628 dated 31 October 2008, 626dated 23 October 2008 and 585 dated 15 October 2007,M-2007-006 dated 28 February 2007, Circular Nos. 558 dated22 January 2007, 546 dated 17 November 2006 and 509 dated01 February 2006)Secs. 4389Q - 4393Q (Reserved)Sec. 4394Q Acquired Assets in Settlementof Loans. The following rules shall governassets acquired in settlement of loans.§ 4394Q.1 (Reserved)§ 4394Q.2 (2008 - 4394Q.1) Bookinga. ROPA in settlement of loansthrough foreclosure or dation in paymentshall be booked under the ROPA accountas follows:(1) Upon entry of judgment in case ofjudicial foreclosure;(2) Upon execution of the Sheriff’sCertificate of Sale in case of extrajudicialforeclosure; and(3) Upon notarization of the Deed ofDacion in case of dation in payment (dacionen pago). ROPA shall be booked initially atthe carrying amount of the loan (i.e.,outstanding loan balance adjusted for anyunamortized premium or discount lessallowance for credit losses computed basedon PAS 39 provisioning requirements,which take into account the fair value of thecollateral) plus booked accrued interest lessallowance for credit losses (computed basedon PAS 39 provisioning requirements)plus transaction costs incurred uponacquisition (such as non-refundablecapital gains tax and documentary stamptax paid in connection with theforeclosure/purchase of the acquired realestate property): Provided, That if thecarrying amount of ROPA exceeds P5.0million, the appraisal of the foreclosed/purchased asset shall be conducted by anindependent appraiser acceptable to theBSP.b. The carrying amount of ROPAshall be allocated to land, building, othernon-financial assets and financial assets(e.g., receivables from third party or equityinterest in an entity) based on their fairvalues, which allocated carrying amountsshall become their initial costs.c. The non-financial assets portion ofROPA shall remain in ROPA and shall beaccounted for as follows:(1) Land and buildings shall beaccounted for using the cost model underPAS 40 “Investment Property”;(2) Other non-financial assets shall beaccounted for using the cost model underPAS 16 “Property Plant and Equipment”;(3) Buildings and other non-financialassets shall be depreciated over theremaining useful life of the assets, whichshall not exceed ten (10) years and three(3) years from the date of acquisition,respectively; and(4) Land, buildings and othernon-financial assets shall be subject to theimpairment provisions of PAS 36“Impairment”.d. Financial assets, shall be reclassifiedand booked according to intention underHFT, DFVPL, AFS, HTM, INMES,Unquoted Debt Securities Classified asLoans or Loans and Receivable andaccounted for in accordance with theprovisions of PAS 39, except interests insubsidiaries, associates and joint ventures,which shall be booked under EquityQ RegulationsPart III - Page 34Manual of Regulations for Non-Bank Financial Institutions