Amendments to the Financial Reporting Package (FRP) and the Simplified FRP on Real and Other Properties Acquired (ROPA) and Non-Current Assets Held for Sale (NCAHS)

MEMORANDUM NO. M-2010-021

To:  All Banks

Subject: Amendments to the Financial Reporting Package (FRP) and the Simplified FRP on Real and Other Properties Acquired (ROPA) and Non-Current Assets Held for Sale (NCAHS)

The Financial Reporting Package (FRP) issued under Circular No. 512 dated 3 February 2006, as amended, and the reportorial template of the Simplified FRP issued under Circular No. 644 dated 10 February 2009, as amended, are hereby revised to incorporate additional data requirements on the ROPA and NCAHS accounts.

Section 1.  The Financial Reporting Package (FRP) issued under Circular No. 512 dated 3 February 2006, as amended, is further amended to read, as follows:

(a)     Table of Contents

“ xxx

“ LINE ITEM INSTRUCTIONS

“  xxx

“ Schedule 17 Real and Other Properties Acquired/Non-Current Assets Held for Sale

“  Schedule 17a Aging of ROPA and NCAHS Accounts

“  Schedule 17b Movement in ROPA and NCAHS Accounts

“   xxx “

(b)     General Instructions

“ Frequency of Reporting

“  xxx

“  The following schedules or columns of particular schedules of the solo and/or consolidated FRP, however, are required to be submitted and/or accomplished only annually (i.e. end December of each year):

“  xxx

“  (10)     Schedule 15a : Investments in Subsidiaries, Associates and Joint Arrangements (Fair Value Column)

“  (11)     Schedule 17 : Real and Other Properties Acquired/Non-Current Assets Held for Sale (Fair Value Column)

“  (12)     Schedule 17a  :  Aging of ROPA and NCAHS Accounts

“  (13)     Schedule 17b : Movement in ROPA and NCAHS Accounts

“  (14)     Schedule 18 : Tax Assets and Liabilities

“  (15)     Schedule 26 : Fair Value of Financial Liabilities

“ xxx “

(c)     Manual of Accounts

“  BALANCE SHEET ACCOUNTS

“  Asset Accounts

“  xxx

“  20.  Non-Current Assets Held for Sale – This refers to ROPA that are available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets and the sale must be highly probable.  This shall be accounted for in accordance with PFRS 5.

“     Allowance for Losses – This refers to the cumulative amount of impairment loss incurred on NCAHS, which shall be accounted for in accordance with PFRS 5.

“   xxx

“   INCOME STATEMENT ACCOUNTS

“   xxx

“   18.  Impairment Loss – This refers to impairment loss incurred on the following assets:

“(a)  xxx

“(d)  NCAHS

“(e)  Goodwill

“(f)   Other Intangible Assets

“(g)   Other Assets

“  xxx”

(d)     Line Item Instructions

“   xxx

“ Schedule 17 – Real and Other Properties Acquired/ Non-Current Assets Held for Sale

“  xxx

“  Net Carrying Amount - xxx

“ Fair Value – Report the fair value of ROPA and NCAHS in this column annually.

“  Additional Information

“  ROPAs contributed to a Joint Arrangement -  Report in the appropriate column the cost, accumulated depreciation, allowance for losses and net carrying amount of ROPAs contributed to a joint arrangement which have not been derecogonized in the books of the bank.  Report the fair value of ROPAs contributed to a joint arrangement annually.

“ Schedule 17a – Aging of ROPA and NCAHS Accounts

“  Report the net carrying amount of ROPA and NCAHS accounts according to the specified aging schedule reckoned from date of acquisition of the real and other properties acquired in settlement of loans.

“ Additional Information

“ (1)    Aging of NCAHS from date of classification – Report the net carrying amount of NCAHS accounts according to the specified aging schedule reckoned from date of reclassification of the real and other properties to NCAHS.

“  Schedule 17b – Movement in ROPA and NCAHS Accounts

“   Report the movement in ROPA and NCAHS accounts during the year; i.e., from 31 December of the preceding year up to 31 December of the reporting year.

“(1)   Opening balance shall correspond to the net carrying amount of ROPA and NCAHS as of 31 December of the preceding year.

“(2)     Movements in ROPA/NCAHS during the period shall refer to the increase/(decrease) in the ROPA and NCAHS from balance as of 31 December of the preceding year up to 31 December of the reporting year arising from the following transactions:

“(a) Acquisitions shall refer to acquisitions of real and other properties in settlement of loans through foreclosure or dation in payment,

“(b) Disposals shall refer to sales or write-offs of ROPA and NCAHS,

“(c)     Reclassifications shall refer to transfers to/from ROPA/NCAHS accounts such as (i) from ROPA to NCAHS, or (ii) from ROPA to Bank Premises, Furniture, Fixture and Equipment, or (iii) from NCAHS to ROPA,

“(d)      Depreciation expense shall refer to the provision for/reversal of depreciation expense on ROPA,

“(e)  Provision for impairment shall refer to the provision for/reversal of impairment on ROPA, and

“(f)    Others shall refer to adjustments/ transactions affecting ROPA and NCAHS, other than those mentioned in Items “(a)” to “(e)”.

“(3)      Closing balance shall correspond  to   the   net   carrying amount of ROPA and NCAHS as of 31 December of the reporting year.

“  Schedule 37 – Impairment Loss

“ Report the impairment loss incurred on the following asset accounts:

“(a)   xxx

“(d)   NCAHS

“(e)   Intangible Assets; and

“(f)   Other Assets.

“ xxx”

(e)    Reportorial Template

The reportorial template of the FRP issued under Circular No. 512, as amended, as well as the Simplified FRP issued under Circular No. 644, as amended, is revised, as follows:

(a)     Balance Sheet – Insertion of rows to present the allowance for losses on NCAHS and the net carrying amount of NCAHS,

(b)      Income Statement – Insertion of rows to present impairment loss on NCAHS accounts,

(c)      Schedule 17 – Real and Other Properties Acquired/Non-Current Assets Held for Sale

(i)      Inclusion of columns pertaining to the fair value of ROPA and NCAHS which shall be accomplished by banks on an annual basis,

(ii)     Blocking of cells/fields pertaining to accumulated depreciation for ROPA and NCAHS accounts that are in the form of land,

(iii)     Blocking of cells/fields pertaining to the Foreign Regular column for ROPA and NCAHS accounts, and

(iv)    Revision in the title of the schedule to “Real and Other Properties Acquired/Non-Current Assets Held for Sale”,

(d)     Schedule 17a – Aging of ROPA/NCAHS

Insertion of an annual schedule which provides for the aging of ROPA and NCAHS accounts.

(e)     Schedule 17b – Movement in ROPA and NCAHS Accounts

Insertion of an annual schedule which provides for the movement in ROPA and NCAHS accounts in terms of acquisitions, disposals, reclassifications, depreciation expense, and provision for impairment.

(f)      Schedule 37 – Impairment Loss

Insertion of rows to present impairment loss on NCAHS accounts. The details of the proposed amendments to the reportorial template of the FRP and the simplified FRP are in Annexes A and B.

Section 3.   Banks shall report their ROPA and NCAHS holdings in accordance with the provisions of this Memorandum to All Banks in the FRP report format (both solo and consolidated basis) issued under Circular No. 512, as amended, and the Simplified FRP report format issued under Circular No. 644, as amended, starting with the reporting period ending 31 December 2010.

Banks may download the revised reporting templates from the BSP website under http://www.bsp.gov.ph/frp/templates or request these from:

The Director Supervisory Data Center (SDC) Bangko Sentral ng Pilipinas 16th Floor, Multi-storey Building BSP Complex, A. Mabini Street Malate, Manila 1004

For strict compliance.

NESTOR A. ESPENILLA, JR. Deputy Governor