Title
Clarification on Undivided Profits Transfer
Law
Bsp Circular Letter
Decision Date
Sep 17, 1992
The September 17, 1992 BSP Circular Letter clarifies the mandatory transfer of "Undivided Profits" to the "Surplus-Free" account for commercial banks, detailing the corresponding transfer of Foreign Currency Deposit Unit (FCDU) assets to ensure compliance with accounting regulations.
A

Key Provisions on Profit Transfer

  • Upon transferring FCDU profits to the Bank Proper's regular books, there must be a corresponding transfer of related FCDU assets.
  • The assets subject to transfer include:
    • Foreign currency deposits with the Central Bank.
    • Foreign currency deposits with foreign banks.
    • Foreign currency swapped with the Central Bank, represented by peso accounts arising therefrom.
    • Foreign currency deposits with residents of Offshore Banking Units (OBUs) and other Expanded Foreign Currency Deposit Units (EFCDUs), excluding deposits with FCDUs.
    • Any amounts due from the Bank Proper, if applicable.

Compliance Requirement

  • Strict adherence to these provisions is mandated.
  • The clarification aims to ensure uniform accounting practice and accurate reflection of asset and profit transfers in bank records.

Authority and Date of Effect

  • The circular was issued by the Governor of the Bangko Sentral ng Pilipinas (BSP), Jose L. Cuisia, Jr., on September 17, 1992.
  • It amends previous directives issued in CB Circular Nos. 343/547 and Circular Letter dated September 20, 1985, concerning the Revised Manual of Accounts for Commercial Banks.

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