III.

Analysis

1. The balances of the financial assets at FVTPL were shown as follows:

There was an increase of 54.73% on financial assets at fair value through profit or loss due to an
unrealized gain of 4,714 reported as Trading gain under Other Operating Income in the statement of
income for the year eneded December 31, 2015.

2. There was an acquisition of an available-for-sale securities for the year ended December 31,
2015. This acquisition resulted to an increase of the AFS securities and resulted to an outflow of
cash in the amount of Php 455,074 as reported in the statement of cash flows.

3. The allowance for impairment loss of the AFS securities as of December 31, 2015 were
determined as follows from note 14 of the financial statements of the BDO Unibank Group:

Allowance for Impairment

Balance at beginning of year

Impairment loss

Balance at end of year

The impairment loss recognized for the year 2015 in the amount of Php 1,761 is reported on the
statement of income of the entity.

4. From the disposal of AFS securities in the amount of Php 459,817 for the year ended December
31, 2015, this resulted to a transfer of realized losses on AFS securities to statements of income
in the amount of 1,219.
5. Due to the changes in fair value of the entitys AFS securities, an unrealized fair value loss was
recognized in the amount of Php 2,457. This was reported as part of the total other
comprehensive Income (Loss) in the statement of comprehensive income.

*Copy OCI
III. Analysis PPE (copy lease agreement 51-52

1. The increase of 17.64% of the total property and equipment was mainly because of the
completion of Sky Tower and its turn over to Operations, the acquisition of Jeju Sun in Jeju
Island, South Korea; the purchase of land in Muui and Silmi islands, Incheon, South Korea and
land in Quezon City, Philippines.

2. With the increase of the property and equipment due to reclassification of construction in
progress, additions and effect of business combination less any retirements, the provision of
depreciation and amortization as of December 31, 2015 increased by 73.93 percent.

2015 2014

Depreciation and Amortization 4,575,556,212 2,630,677,688 73.93%

3. As shown from the statement of cash flows of the entity, the retirement of the following items
of property and equipment resulted to a loss on retirement in the amount of 48,078,199 from
the total proceeds of disposal amounting to 4,250,304 as computed below.

Bldg. and Improvements Office F and F Transpo Eqpt. Total

Cost

Accumulated Depreciation

Carrying Amount

Proceeds

Carrying Amount

Loss on Retirement

4. The additions pertaining to the Land and Land Improvement account consisted of the
acquisition of parcels of land in Muui and Silmi islands in Incheon, South Korea for P=3,759.7
million and the purchase of a 15,676 square meter land in Vertis North, Quezon City Central
Business District for P 1,977.4 million. Only 60% of the purchase price of the latter was paid that
resulted to a payable to NHA in the amount of Php 790,960,797.

5. All legal and professional fees, including commitment fee, incurred in relation to the loans,
totaling P=751.1 million as of December 31, 2015 were capitalized. Debt issue costs were
amortized using EIR method. For the year ended December 31, 2015, amortization of debt issue
costs (net of interest accretion on the option) amounting to =P7.6 million, and interest charges
amounting to P=77.0 million were capitalized as part of Property and equipment.
6. Pursuant to the amended deed of assignment and with the consent of PAGCOR, the rent
expense related to this lease is to be capitalized as part of Property and equipment amounting
to P=582.5 million as of December 31, 2015. Rent expense amounting to P=464.5 million, was
recognized as part of Rent expense account under operating costs and expenses in the 2015
consolidated statements of comprehensive income,
7. Due to the nearly completion of the construction of the Sky Tower, 70.19% of Php
3,074,407,540,representing the amount construction in progress before reclassification, was
reclassified as follows: