MORNBFI Vol. 1 - Planters Development Bank

APP. Q-1008.12.31C. Credit card receivables. Credit cardreceivables shall be classified inaccordance with age as follows:No. of days past due Classification91 - 120 Substandard121 - 180 Doubtful181 or more LossThe foregoing is the minimumclassification requirement. Managementmay therefore formulate additional specificguidelines.II. Investments and Other Risk AssetsA. Investment in debt securities andmarketable equity securities. Theclassification, accounting procedures,valuation and sales and transfers ofinvestment in all debt securities andmarketable equity securities is inAppendix Q-20.B. Equity investment in affiliates shall bebooked at cost or book value whichever islower on the date of acquisition. If cost isgreater than book value, the excess shallbe charged in full to operations or bookedas deferred charges and amortized asexpense over a period not exceeding five(5) years. Subsequent to acquisition, if thereis an impairment in the recorded value, theimpairment should adequately be providedwith allowance for probable losses.C. Other property owned or acquired1. The basic characteristics of realestate property acquired subject to"Substandard" classification are as follows:a. Acquired for less than five (5) yearsunless worthless.b. Converted into a Sales ContractReceivable.c. Sold subject to a firm purchasecommitment from a third party before theclose of the examination.2. The basic characteristics of realestate property acquired subject to "Loss"classification are as follows:a. Foreclosure expenses and othercharges included in the book value of theproperty, excluding the amount of nonrefundablecapital gains tax anddocumentary stamp tax paid in connectionwith the foreclosure/purchase which meetthe criteria for inclusion in the book valueof the acquired property.b. The excess of the book value overthe appraised value.c. Property whose title is definitely lostto a third party or is being contested incourt.d. Property wherein the exercise of theright of usufruct is not practicable orpossible as when it is eroded by a river oris under any like circumstances.Real estate property acquired are notsound bank assets. Because of their nature,that is, non-liquid and non-productive, theirimmediate disposal through sale is highlyrecommended.D. Acquired or repossessed personalproperty1. All personal property owned oracquired held for three (3) years or less fromdate of acquisition shall be classified asSubstandard assets.2. The basic characteristics ofacquired or repossessed personal propertyclassified as Loss are as follows:a. Property not sold for more thanthree (3) years from date of acquisition;b. Property which is worthless or notsaleable;c. Property whose title is lost or isbeing contested in court;d. Foreclosure expenses and othercharges included in the book value of theproperty; ande. The excess of the book value ofthe property over its appraised orrealizable value.Q RegulationsAppendix Q-10 - Page 4Manual of Regulations for Non-Bank Financial Institutions