QuestionsQuestions (BSP CIRCULAR NO. 555)
It amends Section 3(c.1) of BSP Circular No. 520 by revising the timing of booking Real and Other Properties Acquired (ROPA) that are obtained through foreclosure or dation in payment.
Monetary Board Resolution No. 10 dated 4 January 2007.
Section 3(c.1).
Upon entry of judgment.
Upon execution of the Sheriff’s Certificate of Sale.
Upon notarization of the Deed of Dacion (dacion en pago).
Initially at the carrying amount of the loan, adjusted for unamortized premium/discount less allowance for credit losses (PAS 39 provisioning requirements), plus booked accrued interest less allowance for credit losses (PAS 39), plus transaction costs incurred upon acquisition (e.g., non-refundable capital gains tax and documentary stamp tax related to the acquisition/foreclosure).
Outstanding loan balance adjusted for any unamortized premium or discount, less allowance for credit losses computed based on PAS 39 provisioning requirements, taking into account the fair value of the collateral.
Accrued interest that has been booked (and then reduced by allowance for credit losses per PAS 39), plus transaction costs incurred upon acquisition such as non-refundable capital gains tax and documentary stamp tax paid in connection with the foreclosure/purchase of the acquired real estate.
Allowance for credit losses; it must be computed based on PAS 39 provisioning requirements.
It requires the appraisal of the foreclosed/purchased asset by an independent appraiser acceptable to the BSP when the carrying amount of ROPA exceeds P5 million.
When the carrying amount of ROPA exceeds P5 million.
An independent appraiser acceptable to the BSP.
Non-refundable capital gains tax and documentary stamp tax paid in connection with the foreclosure/purchase of the acquired real estate property.
Fifteen (15) calendar days after its publication either in the Official Gazette or in a newspaper of general circulation.
They determine the exact point in time when the bank/financial institution must recognize and book the acquired real property under the ROPA account for accounting purposes.