Net Amount Available for Dividends Defined
The net amount available for dividends is defined as the amount of unrestricted or free retained earnings and the profit and loss summary, from which certain deductions must be made.
Specific Deductions from Retained Earnings and Profit and Loss Summary
The following items are deducted from unrestricted retained earnings and the profit and loss summary to determine the net amount available for dividends:
- Bad debts: Those against which valuation reserves are not required to be set up by the Bangko Sentral ng Pilipinas (BSP).
- Unbooked valuation reserves and capital adjustments: All unbooked valuation reserves and other unbooked capital adjustments required by the BSP, regardless of whether they are allowed to be set up on a staggered basis.
- Deferred income tax: Deductions for deferred income taxes as applicable.
- Accumulated profits from subsidiaries: Specifically, profits not yet received but already recorded by the quasi-bank under the equity method of accounting as its share in subsidiary profits.
- Accrued interest adjustments: Accrued interest that must be excluded pursuant to Item "c" of Subsection 4307Q.7, net of booked valuation reserves on accrued interest receivables or allowances for uncollectible interest on loans.
- Foreign exchange profits: Profits arising from the revaluation of foreign exchange denominated accounts.
Legal Effectivity
The amendment took effect immediately upon its approval and adoption on May 24, 2005, as indicated by the signature of Officer-in-Charge Amando M. Tetangco, Jr., ensuring prompt implementation.