BSP Memorandum

March 1, 2002 BSP MEMORANDUM TO : All Banks and Other Financial Intermediaries Performing Trust, Other Fiduciary Business and Investment Management Activities The Monetary Board, in its Resolution No. 212 dated February 14, 2002, approved the revision of the Manual of Accounts for Trust, Other Fiduciary Business and Investment Management Activities and the following pertinent report forms to conform with the new Manual of Accounts: 1. Report on Trust and Other Fiduciary Business and Investment Management Activities with prescribed schedules BSP 7-16-35 TR for banks with authority to engage in trust business BSP 7-26-23 TR for investment houses with authority to engage in trust business 2. Report on Investment Management Activities with prescribed schedules BSP 7-16-35 IM for banks with authority to engage in investment management activities BSP 7-26-23 IM for investment houses with authority to engage in investment management activities The new forms will be used beginning with the reports as at March 31, 2002. Likewise, the Trust Accounts Template provided under Circular Nos. 108 and 201 dated May 6, 1996 and May 1, 1999, respectively, will be revised. FOR THE MONETARY BOARD: (SGD.) RAFAEL B. BUENAVENTURA Governor MANUAL OF ACCOUNTS for TRUST AND OTHER FIDUCIARY BUSINESS and for INVESTMENT MANAGEMENT ACTIVITIES TRUST AND OTHER FIDUCIARY ACCOUNTS (TOFA) COMMON TRUST FUNDS (CTF) INVESTMENT MANAGEMENT ACCOUNTS (IMA) ASSETS 1. INVESTMENT IN GOVERNMENT SECURITIES This represents investment in government securities purchased outright from the issuer or other parties. This consists of evidences of indebtedness of the Republic of the Philippines and of the Bangko Sentral ng Pilipinas and any other evidences of indebtedness or obligations the servicing and repayment of which are fully guaranteed by the Republic of the Philippines. A sub-account shall be maintained for investment in short-term market-yielding government securities purchased directly from the Bangko Sentral ng Pilipinas-Treasury Department that are used as liquidity reserve for common trust funds and trust and other fiduciary accounts (TOFA) Others. Accumulated Bond Discount Investment in Government Securities Accumulated Premium Amortization Investment in Government Securities This represents the earned portion of the discount and/or the amortized or expended portion of the premium on investment in government securities and shall be debited or credited, as the case may be, to this account every month or in the case of investments made by common trust funds, every time a valuation or pricing is made in accordance with the provisions of the approved plan for such funds. The corresponding contra account is debited or credited to the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation Investment in Government Securities shall be recorded at: Cost if delivered at inception and during the life of trust, other fiduciary or investment management account by the trustor or principal, or if purchased by the trustee, fiduciary, or investment manager out of trust, other fiduciary or investment management funds, where discretionary authority to buy or sell is given to the trustee, fiduciary or investment manager; or at Fair Market Value if received by way of an irrevocable trust or under executorship or administrative proceedings since this is the value used in the computation of donor's or estate tax. Financial Statement Presentation The total amount of Investment in Government Securities shall be shown as increased or decreased by the corresponding Accumulated Bond Discount or Premium Amortization, as the case may be. 2. INVESTMENT IN OTHER SECURITIES AND DEBT INSTRUMENTS This represents investment in various types of securities, commercial papers and other debt instruments issued by private parties and those issued by political subdivisions and instrumentalities of the government including corporations owned or controlled by the government, the servicing and repayment of which are not guaranteed by the Republic of the Philippines. It also includes investment in money market or deposit substitute instruments issued by financial intermediaries with government or private securities or commercial papers as underlying security. Accumulated Bond Discount Investment in Other Securities and Debt Instruments Accumulated Premium Amortization Investment in Other Securities and Debt Instruments This represents the earned portion of the discount and/or the amortized or expended portion of the premium on the investment and shall be debited or credited, as the case may be, to this account every month or in the case of investment made by common trust funds, every time a valuation or pricing is made in accordance with the provisions of the approved plan for such funds. The corresponding contra account is debited or credited to the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Allowance for Probable Losses Investment in Other Securities and Debt Instruments This represents the amount set up to provide for losses which may arise from non-collection of investment in other securities and debt instruments as may be determined by the trustee, fiduciary or investment manager and/or as may be prescribed under rules and regulations of the Bangko Sentral ng Pilipinas on similar investments of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation Investment in Other Securities and Debt Instruments shall be recorded at: Cost if delivered at inception and during the life of the trust, other fiduciary or investment management account by the trustor or principal, or if purchased by the trustee, fiduciary, or investment manager out of trust, other fiduciary or investment management funds, where discretionary authority to buy or sell is given to the trustee, fiduciary or investment manager; or at Fair Market Value if received by way of an irrevocable trust or under executorship or administrative proceedings since this is the value used in the computation of donor's or estate tax. Financial Statement Presentation The total amount of Investment in Other Securities and Debt Instruments shall be shown as increased or decreased by the corresponding Accumulated Bond Discount or Premium Amortization, as the case may be, and net of the corresponding Allowance for Probable Losses. In the financial statements and reports to trustors and/or principals, the prevailing fair market value of the investment shall be shown parenthetically. 3. INVESTMENT IN SHARES OF STOCK This represents investment in preferred and/or common shares of stock of a corporation whether purchased from the stock exchange or direct from the issuer. The following sub-control accounts shall be maintained for this account: a. Short-Term Equity Investment representing investment in shares of stock intended to be sold, traded or disposed for profit. These are further classified as follows: Stock Listed in the Stock Exchange representing shares of stock listed and traded in the stock exchange. Stock Not Listed in the Stock Exchange representing shares of stock not listed in the exchange, which are traded over the counter or purchased directly from the issuer. b. Long-Term Equity Investment representing investment in shares of stock of a company for purposes of control, affiliation or other continuing business advantages. SCETHa Accumulated Market Gains/(Losses) Short-Term Equity Investment This represents the amount of unrealized gains or losses arising from the fair market valuation of short-term equity investments. Its reciprocal entries in the same amount shall be recorded as Deferred Items Revaluation Contra Account, which is a separate component of accountabilities. Upon the actual sale or disposition of an investment, reversing entries pertaining to said investment shall be made with the actual gain or loss in the investment taken up as an increase or decrease in the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. For common trust funds, the account title to use is CTF Revaluation Account Investment in Shares of Stock. Allowance for Probable Losses Long-Term Equity Investment This represents the amount set up to provide for possible losses that may arise on the long-term equity investment as may be determined by the trustee, fiduciary, or investment manager and/or as may be provided under the rules and regulations of the Bangko Sentral ng Pilipinas on similar investment of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary, or investment manager to the trustor or principal. This account shall not be applicable to short-term equity investment and those funded by common trust funds which are subject to periodic revaluation. CTF Revaluation Account Investment in Shares of Stock This represents the difference between the original cost and the value of investment made by common trust funds in shares of stock based on the method of valuation stated in the approved plan for such funds. Its reciprocal entry in the same amount shall be recorded as Deferred Items CTF Revaluation Contra Account. Upon the actual sale or disposition of an investment, reversing entries pertaining to said investment shall be made with the actual gain or loss in the investment taken up as an increase or decrease in the income accountability of the trustee of the common trust fund to the participants. Valuation Investment in Shares of Stock shall be recorded at: Cost if delivered at inception and during the life of the trust, other fiduciary or investment management account by the trustor or principal, or if contributed or transferred to a successor trustee and there is no change in beneficial ownership, or if purchased by trustee, fiduciary or investment manager out of trust, fiduciary or investment management funds where discretionary authority to buy or sell is given to the trustee, fiduciary or investment manager; or at TcHDIA Fair Market Value if received by way of an irrevocable trust or under executorship or administrative proceedings since this is the value used in the computation of donor's or estate tax, or if there are no available/sufficient records confirming the original acquisition cost of shares contributed or transferred to a successor trustee with no change in beneficial ownership. Long-term equity investment representing more than fifty percent (50%) of the voting stock of a single investee company shall be revalued using the equity method of accounting where the share in the earnings or losses is added to or subtracted from the asset account and the income accountability of the trustee, fiduciary or investment manager. The recording system shall, however, see to it that the original cost of the investment is maintained to allow disclosure of such information in the required reports. Financial Statement Presentation Short-term equity investment shall be shown as increased or decreased by the corresponding accumulated market gain/(losses). In the case of common trust fund, Investment in Shares of Stock shall be shown at cost, plus or minus the corresponding CTF Revaluation Account indicating the basis of valuation provided in the CTF plan. Long-term equity investment shall be shown at cost less the corresponding Allowance for Probable Losses. In the financial statements and reports to trustors or principals, Investment in Shares of Stock shown at cost or nominal value shall also parenthetically show their corresponding prevailing fair market value. Investment in Shares of Stock shown at book value under the equity method of accounting shall also parenthetically show their corresponding cost. Adequate records shall be maintained to enable the trustee to determine at any time the number of stock certificates held (evidences of purchase in the case of scripless or Philippine Central Depository, Inc. [PCD] held shares) and the corresponding number of shares for each certificate/evidence of purchase so that the fair market value of the equity investment can be calculated and presented accurately. caHIAS 4. LOANS AND DISCOUNTS This represents amounts collectible from borrowers arising from claims for money lent that may include, but need not be limited to, money market loans, demand loans, time loans, bills discounted, real estate mortgage loans and bills purchased. The following sub-control accounts shall be maintained for Loans and Discounts: a. Agricultural Loans and Discounts representing loans and discounts to finance agricultural production and related activities, purchase of farm machinery, equipment and implements including work/breeding animals, including, but not limited to, the establishment and operation of poultry, piggery, livestock and fishery projects. b. Commercial Loans and Discounts representing loans and discounts to finance the purchase of goods or merchandise for resale. c. Industrial Loans and Discounts representing loans and discounts to finance the production, processing, transformation, handling and/or transportation of industrial products and/or conservation, enlargement or improvement of productive properties, or the acquisition of machinery or other fixed installations. d. Real Estate Loans and Discounts representing loans and discounts to finance and/or refinance the construction, acquisition, expansion, or improvement of rural and urban properties. e. Consumption Loans and Discounts representing loans and discounts to finance personal and household needs, such as purchase of cars, household appliances, furniture and fixtures and/or to pay taxes, hospital and educational bills. f. Other Loans and Discounts representing loans and discounts for purposes other than agricultural, commercial, industrial, real estate or consumption. g. DOSRI Loans representing loans extended to directors, officers, stockholders and their related interests pursuant to the rules and regulations provided in the Manual of Regulations for Banks and the Manual of Regulations for Non-Bank Financial Institutions, as amended from time to time. h. Restructured Loans representing loans and discounts which are defined as restructured under existing rules and regulations of the Bangko Sentral ng Pilipinas. i. Past Due Loans representing loans and discounts which are defined as past due under existing rules and regulations of the Bangko Sentral ng Pilipinas. Loans classified as such shall remain in this account until fully paid, arrangements are formalized for their renewal/extension/restructuring or collection/foreclosure case has been filed in court/sheriff's office, as the case may be. Sub-accounts shall be maintained for each of the sub-control accounts from items a to h above. "a. Agricultural Loans and Discounts to xxx xxx xxx "h. Restructured Loans j. Items in Litigation representing loans and discounts for which collection/foreclosure cases have been filed in court or sheriff's office, as the case may be. The loan or discount shall remain in this account during the pendency of the proceedings or until full payment, foreclosure of the collateral, restructuring of the obligation, or such other disposition made as would cause such proceedings to cease. Unless otherwise provided for in the trust/fiduciary agreement, all expenses incurred incidental to the litigation shall be charged to the corresponding income accountability of the trustee. The balance of such expenses, if any, shall be charged to the principal accountability. The corresponding memorandum entries shall be made on the individual subsidiary ledgers for these items and also for interest earned but not yet collected. Sub accounts shall be maintained for each of the sub-control accounts from items a to h above. "a. Agricultural Loans and Discounts to xxx xxx xxx "h. Restructured Loans Allowance for Probable Losses Loans and Discounts This represents the amount set up to provide for losses which may arise from non-collection of loans and discounts as may be determined by the trustee, fiduciary or investment manager, and/or as may be provided under the rules and regulations of the Bangko Sentral ng Pilipinas on similar loans of the bank or institution proper. The amount set up shall be charged against the income accountability of the trustee or investment manager to the trustor or principal. General Loan Loss Provision This represents the amount of general provision for loan losses not linked to individually identified uncollectible accounts required to be set under existing regulations . Valuation Loans and Discounts shall be recorded at face amount net of principal collections. In the case of restructured loans, capitalized interest thereon shall be added to the face amount, net of principal collections. Financial Statement Presentation Loans and Discounts shall be shown net of the corresponding Allowance for Probable Losses and General Loan Loss Provision. 5. OTHER ASSETS a. INVESTMENT IN COMMON TRUST FUND This represents the amount of investment or participation in a common trust fund as may be allowed under existing rules and regulations (Subsections X410.4 and 4410Q.4) The trustee, fiduciary or investment manager shall maintain records showing the prevailing book value of each investment in common trust fund based on the valuation reports submitted by the trustee of the CTF in accordance with the approved plan. The following sub-control accounts shall be maintained for the account: 1) Own Trust Department representing investment of fund administered by the trustee in its common trust fund in accordance with existing rules and regulations. 2) Other Institutions' Trust Department representing investment in a common trust fund administered by the trust department of another bank, investment house or a trust corporation. Accumulated Market Gains/(Losses) Investment in Common Trust Funds This represents the amount of unrealized gains or losses arising from the difference between the original cost and the net asset value of an investment in a common trust fund. Its reciprocal entry in the same amount shall be recorded as Deferred Items-Revaluation Contra Account, which is a separate component of accountabilities. Upon the actual redemption or disposition of an investment, a reversing entry pertaining to said investment shall be made with the actual gain or loss in the investment taken up as an increase or decrease in the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation Investment in Common Trust Fund shall be recorded at the prevailing net asset value as prescribed in the Declaration of Trust or CTF Plan. Financial Statement Presentation The amount of Investment in Common Trust Fund shall be shown as increased or decreased by the corresponding accumulated market gains/(losses). b. INVESTMENT IN ASSET-BACKED SECURITIES This represents investment in asset-backed securities (ABS) issued by a special purpose vehicle pursuant to a Securitization Plan established in accordance with existing rules and regulations of the appropriate regulatory authorities. The following sub-control accounts shall be maintained for this account: a. Investment in Asset-Backed Securities of a Special Purpose Trust b. Investment in Asset-Backed Securities of a Special Purpose Corporation Allowance for Probable Losses Investment in Asset-Backed Securities This represents the amount set up to provide for possible losses that may arise on the investment in asset-backed securities as may be determined by the trustee, fiduciary, investment manager and/or as may be provided under the rules and regulations of Bangko Sentral ng Pilipinas on similar investment of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation Investment in Asset-Backed Securities shall be recorded at: Cost if delivered at inception and during the life of the trust, other fiduciary or investment management account by the trustor or principal or if contributed transferred to a successor trustee and there is no change in beneficial ownership, or if purchased by the trustee, fiduciary or investment manager out of trust, fiduciary or investment management funds where discretionary authority to buy or sell is given to the trustee, fiduciary or investment manager; or at Fair Market Value if received by way of an irrevocable trust or under executorship or administrative proceedings since this is the value used in the computation of donor's or estate tax, or if there are no available/sufficient records confirming the original acquisition cost of shares contributed or transferred to a successor trustee with no change in beneficial ownership. Financial Statement Presentation Investment in Asset-Backed Securities shall be shown at cost less the corresponding Allowance for Probable Losses. In the financial statements and reports to trustors principals, Investment in Asset-Backed Securities shown at cost shall also parenthetically show their corresponding prevailing fair market value. Adequate records shall be maintained to enable the trustee to determine at any time the fair market value of the asset-backed securities held. c. INVESTMENT IN REAL ESTATE This represents land, building and improvements thereon, including condominium projects held for investment purposes. Allowance for Probable Losses Investment in Real Estate This represents the amount set up for losses that may arise from the investment as may be determined by the trustee, fiduciary or investment manager and/or as may be provided under existing rules and regulations of the Bangko Sentral ng Pilipinas on similar investment of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. This account shall not be applicable to an investment funded by common trust funds subject to periodic revaluation which shall utilize the succeeding account. CTF Revaluation Account Investment in Real Estate This represents the difference between the original cost and the value of an investment in real estate made by a common trust fund based on the method of valuation stated in the approved plan for such fund. Its reciprocal entry in the same amount shall be recorded as Deferred Items CTF Revaluation Contra Account. Upon the actual sale or disposition of the real estate investment, reversing entry pertaining to said investment shall be made the actual gain or loss in the investment taken up as an increase or decrease in the income accountability of the trustee of the common trust fund to the participants. Real Estate Revaluation Account Investment in Real Estate 1) Pre-Need Plans Real Estate Revaluation Account This represents the difference between the original cost and the appraised value of investment in real estate of trust accounts opened by pre-need compliance with the Securities and Exchange Commission (SEC) requirements. Its reciprocal entry in the same amount shall be recorded as Pre-Need Plans Revaluation Contra Account Investment in Real Estate. 2) Employee Benefit Plans Under Trust Real Estate Revaluation Account This represents the difference between the original cost and the appraised value of investment in real estate of employee benefit plans (i. e., provident fund, pension plan and defined benefit or gratuity plan) held under trust by the trustee in accordance with the policies prescribed by the plans' board of trustees and incorporated in the indenture/agreement. Its reciprocal entry in the same amount shall be recorded as Employee Benefit Plans Held Under Trust Revaluation Contra Account Investment in Real Estate. Valuation Investment in Real Estate shall be recorded at: Cost if delivered at inception and/or during the life of the trust, other fiduciary or investment management account or if purchased or constructed by the trustee, fiduciary or investment manager out of the trust, fiduciary or investment management fund; or at Fair Market Value if received by way of an irrevocable trust or under executorship or administrative proceedings since this is the value used in the computation of donor's or estate tax. Financial Statement Presentation Investment in Real Estate shall be shown net of the corresponding Allowance for Probable Losses. In financial statements and reports to trustors or principals, the real estate investment shown at cost shall also parenthetically show their prevailing fair market value. In the case of a common trust fund, trust fund of a Pre-need Company and Employee Benefit Plans Under Trust, Investment in Real Estate shall be shown at cost, plus or minus the corresponding Revaluation Account indicating the basis of valuation provided in the CTF plan, Memorandum Circular No. 1 Series 2000 issued by the SEC, or the trust indenture/agreement on the policies prescribed by the board of trustees of the employee benefit plan. d. REAL AND OTHER PROPERTIES ACQUIRED IN SETTLEMENT OF LOANS This represents real and other properties, other than those used for banking/business purposes or held in the investment portfolio, acquired in settlement of loans by the trustee, fiduciary or investment manager for the account of the trustor or principal. Allowance for Probable Losses Real and Other Properties Acquired in Settlement of Loans This represents the amount set up to provide for losses on such properties as may be determined by the trustee, fiduciary or investment manager and/or as may be provided under the rules and regulations of the Bangko Sentral ng Pilipinas on similar properties of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation Real and Other Properties Acquired in Settlement of Loans through foreclosure or dation in payment shall be recorded at the balance of the loan (principal plus booked accrued interest receivable after considering Allowance for Uncollected Interest on loans less unamortized income) or bid/purchase price, whichever is lower. The amount of the non-refundable capital gains tax and documentary stamp tax in connection with the foreclosure/purchase may be included in the book value of the acquired real estate, provided that the total book value does not exceed the appraised value of the asset acquired, as determined by an independent appraiser acceptable to the Bangko Sentral ng Pilipinas. Unless otherwise provided in the governing instrument, collections such as rental income and other types of receipts or fruits of the acquired properties shall be credited to income while expenses such as taxes, repairs, maintenance, insurance premiums shall be charged to the income account. Financial Statement Presentation Real and Other Properties Acquired in Settlement of Loans shall be shown at book value as stated above, net of the corresponding Allowance for Probable Losses. e. REAL PROPERTIES ADMINISTERED Real Properties Administered, as distinguished from Investment in Real Estate, represents land, building and all types of improvements thereon held by a trustee or fiduciary for the account of a trustor or principal for the purpose of administering such properties, such as to collect rent, proceeds from the sale of fruits of administered properties, pay taxes, repairs and maintenance. Appropriate records shall be kept for each real property regarding basic information, such as its prevailing fair market value, assessed value and real estate tax payments. Valuation Real Properties Administered shall be booked at P1.00 per title or document of ownership. Unless otherwise provided in the governing trust or fiduciary agreement, collections such as rental income and other types of receipts or fruits of the administered property shall be credited to income while administration expenses such as taxes, repairs, maintenance, insurance premiums shall be charged to the income account. Financial Statement Presentation Real Properties Administered is shown as a separate item in the Statement of Condition of the Trust Department and in the individual financial statements and reports to trustors or principals. The prevailing market value of the property administered shall be disclosed parenthetically. f. REAL OR OTHER PROPERTIES HELD UNDER MORTGAGE OR COLLATERAL TRUST This represents properties held by the trustee that are used as security for loans extended to borrowers or for bond issues under a mortgage or collateral trust indenture. Appropriate records shall be kept for purposes of reporting to the borrower/bond issuer and beneficiaries/creditors, as may be required in the mortgage or collateral trust indenture. Valuation Real or Other Properties Held Under Mortgage or Collateral Trust shall be booked at P1.00 per title or document of ownership. In the event of foreclosure of the property on account of borrower's default in accordance with the terms and conditions of the trust indenture, each title or document of ownership shall continue to be booked at P1.00. The account shall be decreased upon full payment of the obligation by the return of title or document of ownership to the borrower/bond issuer/mortgagor, or upon sale or disposal of foreclosed property. Sales proceeds of foreclosed properties shall be recorded at actual realized value under the account "Deposits in Banks". Subject to the expressed provision of mortgage/collateral trust indenture, sales proceeds may be invested/managed by the trustee. Such investment shall be debited to an appropriate investment account. Income earned from deposits/investments and expenses incurred shall be recorded and considered in the distribution of the account. Financial Statement Presentation Real or Other Properties Held Under Mortgage or Collateral Trust are shown as a separate item in the Statement of Condition of the Trust Department and in the individual Financial Statement and reports to trustors/principals. AHSaTI g. MISCELLANEOUS RECEIVABLE 1) Interest Receivable This represents interest on loans, advances, bonds and other interest-bearing securities or instruments earned, as allowed under existing rules and regulations, but not yet collected or received. It also includes the elapsed portion of interest paid to the previous holder of bonds/notes purchased before interest due date or maturity date. The account is reduced when interest is collected or whenever a corresponding loan account becomes past due under the rules of the Bangko Sentral ng Pilipinas, in which case, the amount credited is charged to the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. 2) Dividends Receivable This represents cash dividends on investments in stocks that have been earned but not yet collected or received. 3) Rentals Receivable This represents rentals on properties under lease already earned but not yet collected or received. 4) Contributions Receivable This represents contributions from pension, retirement and other similar plans already due but not yet collected or received. 5) Sales Contracts Receivable This represents the balance of the selling price of an asset or property owned and/or acquired, which is sold on installment basis under a duly executed agreement to sell, title of which is transferred to the buyer upon full payment of the installment due. Any loss on the sale shall be charged immediately to the income accountability of the trustee, fiduciary or investment manager to the client. The balance of such loss, if any, shall be charged to the principal accountability. 6) Other Miscellaneous Receivable This represents any claim or receivable which cannot be appropriately classified under any of the foregoing Miscellaneous Receivable accounts. Allowance for Probable Losses Miscellaneous Receivable This represents the amount set up to provide for non-collection of any account lodged as Miscellaneous Receivable as may be determined by the trustee, fiduciary or investment manager and/or as may be provided under the rules and regulations of the Bangko Sentral ng Pilipinas on similar accounts of the bank/institution proper. The amount set up shall be charged against the income accountability of the trustee, fiduciary or investment manager to the trustor or principal. Valuation The foregoing accounts shall be recorded at face amount. Financial Statement Presentation Each of the foregoing accounts shall be shown separately under the Miscellaneous Receivable classification together with the corresponding Allowance for Probable Loses to show the net amount. h. DUE FROM BANGKO SENTRAL This represents the balance of the special deposit account in local currency maintained with the Bangko Sentral ng Pilipinas exclusively to meet the reserve requirements of peso-denominated common trust funds and other similarly managed funds. i. DEPOSITS IN BANKS This represents the balance of trust, other fiduciary or investment management funds maintained in own or other banks in the form of time, savings and/or demand deposits. The account excludes deposits maintained with banks under receivership or liquidation. The following sub-control accounts shall be maintained for the account: 1) Time Certificates of Deposits Own Bank represents the balance of trust, other fiduciary and investment management funds maintained in own bank in the form of time deposits. 2) Time Certificates of Deposits Other Banks represents the balance of trust, other fiduciary and investment management funds maintained in other banks in the form of time deposits. 3) Savings Deposits Own Bank represents the balance of trust, other fiduciary investment management funds maintained in own bank in the form of savings deposits. 4) Savings Deposits Other Banks represents the balance of trust, other fiduciary and investment management funds maintained in other banks in the form of savings deposits. 5) Demand Deposits Own Bank represents the balance of trust, other fiduciary and investment management funds maintained in own bank in the form of demand deposits . EScaIT 6) Demand Deposits Other Banks represents the balance of trust, other fiduciary and investment management funds maintained in other banks in the form of demand deposits. Valuation Deposits in Banks shall be recorded at face amount. Financial Statement Presentation Deposits in Banks shall be shown as a separate item in the statements and reports of the trust or investment management department to trustors or principals. j. CASH This represents the total amount of trust, other fiduciary and investment management funds in the form of Philippine currency notes and coins held in the custody of an accountable officer or employee of the trustee or investment manager. Valuation Cash is recorded at face amount. Financial Statement Presentation Cash is shown as a separate item towards the end of statements and reports to trustors or principals since it usually forms part of the excess funds of trust, other fiduciary investment management accounts. k. CHECKS AND OTHER CASH ITEMS This represents the aggregate value of checks and other cash items received during the day, for deposit the following business day to deposit accounts maintained with own bank or other banks that may consist of checks drawn on other banks Philippine Postal Money Orders and Philippine Treasury Warrants. Valuation Checks and Other Cash Items shall be recorded at face amount. Financial Statement Presentation This account shall be shown as a separate item at face amount. l. MISCELLANEOUS ASSETS This represents assets which cannot be appropriately classified under any of the foregoing asset accounts. Subsidiary ledgers shall be maintained for each type of asset that may include the following: 1) Assets Under Custodianship/Safekeeping/ Depositary Arrangements This represents stock certificates, bonds, documents or other evidences of property held under agency capacity for activities involving stock transfer, registration and other related or similar transactions specified by the client. The trust institution acting as agent of a client shall maintain a complete list of the particulars of these items. 2) Other Miscellaneous Assets This represents other assets which may not be classified under the foregoing account. Valuation Miscellaneous Assets shall be recorded as follows: Cost if purchased by the trustee, fiduciary or investment manager out of trust fiduciary or investment management funds; Appraised Value if delivered at inception of the trust, fiduciary or investment management account, discovered or delivered during the life of the trust, fiduciary or investment management account and/or acquired by donation. Nominal Value of P1.00 per item or certificate if held for safekeeping or custodianship. Nominal Value of P1.00 per client or trustor or principal for activities involving stock transfer, registration and other related or similar transactions. Financial Statement Presentation Miscellaneous Assets shall be presented last of all assets held in local currency. Items shown at cost or nominal value shall indicate their prevailing fair market value parenthetically. m. FCDU/EFCDU TRUST ASSETS This represents all foreign currency assets allowed to be held in trust by a bank arising from its acceptance of trust accounts in eligible foreign currencies under its authority to operate a Foreign Currency Deposit Unit (FCDU) or an Expanded Foreign Currency Deposit Unit (EFCDU). The following sub-control accounts for each type of eligible foreign currency shall be maintained for this account the nature of which shall be the same as those described in the foregoing for similar-peso denominated trust asset accounts: 1) Investment in Government Securities 2) Investment in Other Securities and Debt Instruments 3) Investment in FCDU/EFCDU Common Trust Funds (provided funds are invested allowable FCDU loans and investments) 4) Loans and Discounts 5) Restructured Loans 6) DOSRI Loans 7)) Past Due Loans 8) Items in Litigation 9) Real and Other Properties Acquired in Settlement of Loans 10) Deposits in Banks 11) Foreign Currency Notes and Coins on Hand 12) Miscellaneous Receivables 13) Miscellaneous FCDU/EFCDU Assets Accumulated Bond Discount Accumulated Premium Amortization Accumulated Market Gains/(Losses) Investment in Common Trust Funds Allowance for Probable Losses FCDU/EFCDU Trust Assets Valuation Each of the sub-control accounts shall be recorded in the same manner as their respective counterpart for peso-denominated regular trust accounts but recorded in the original foreign currency amount at transaction date. The total of the sub-control accounts shall correspond to the amount recorded in the main account. Financial Statement Presentation These accounts shall be presented in the Statement of Condition of the trust department at the original foreign currency amount and at their prevailing U.S. dollar and peso equivalent as at reporting date. In the individual statements to trustors, they shall be shown at their original foreign currency amount and at the prevailing US dollar equivalent as at reporting date. n. FOREIGN CURRENCY ASSETS NON-FCDU/EFCDU This represents all foreign currency assets other than those under FCDU/EFCDU which forms part of the peso-denominated trust fund/assets held under executorship, custodianship or trust and other fiduciary accounts or "pure" trust arrangements. Subsidiary ledgers shall be maintained for each type of asset. Valuation Foreign Currency Assets Non-FCDU/EFCDU shall be recorded at their original foreign currency values at transaction dates. Financial Statement Presentations Foreign Currency Assets Non-FCDU/EFCDU shall be presented at the original foreign currency values and at the prevailing U.S. dollar and local currency equivalent as at reporting date. 6. ASSET-BACKED SECURITIES (ABS) ASSET POOL This represents assets held in trust by a bank designated as trustee to administer a Special Purpose Vehicle (SPV) created solely for the purpose of accepting assets conveyed by an Originator/Seller and issuing asset-backed securities pursuant to a Securitization Plan established in accordance with existing rules and regulations of the appropriate regulatory authorities. It shall include assets in the form of loans or receivables conveyed to the SPV and such other assets acquired as a consequence of securitization. a. Assets Conveyed To A Special Purpose Vehicle This represents assets conveyed in the form of loans or receivables conveyed to the Special Purpose Vehicle that makes up an Asset Pool. Valuation Assets Conveyed To A Special Purpose Vehicle shall be recorded at acquisition cost. Financial Statement Presentation Assets Conveyed To A Special Purpose Vehicle shall be presented net of the corresponding Allowance for Probable Losses, with the amount of discount, if any, shown parenthetically. b. Other Assets Asset-Backed Securities Asset Pool This represents various assets generated or acquired as a consequence of securitization such as those arising from collection of receivables by the servicer, remittance of such collection to the trustee, deposit in banks and/or investment in government securities of said collections, recognition of accrued interest receivables on such deposits/investments; foreclosure of collateral of receivables, setting up provision for losses, etc. Accordingly, appropriate sub-accounts shall be maintained as needed, the nature of which shall be essentially the same as those described in the foregoing trust assets. Valuation Other Assets Asset-Backed Securities Asset Pool shall be recorded similar to the prescribed valuation for each trust asset account. Financial Statement Presentation Other Assets Asset-Backed Securities Asset Pool shall be shown in accordance with the required financial statement presentation of the foregoing trust assets, with the amount of discount, if any, presented parenthetically. Allowance for Probable Losses Asset Backed Securities Asset Pool This represents the amount set up to provide for losses which may arise from non-collection of loans or receivables conveyed to the Special Purpose Vehicle and such other assets acquired as a consequence of securitization as may be determined by the trustee and/or as may be provided under the rules and regulations of the Bangko Sentral ng Pilipinas on similar loans or receivables of the bank. The amount set up shall be charged against the income accountability of the trustee to the trustor. ACCOUNTABILITIES 1. PRINCIPAL This represents the property which has been set aside by the owner or the person legally empowered so that it is held in a trust, fiduciary or investment management capacity eventually to be delivered to a person entitled to such principal and the accumulated income derived therefrom. Main accounts to be maintained are: a. TRUSTEESHIP AND OTHER FIDUCIARY ACCOUNTABILITIES This represents the accountabilities of an institution to a client arising from a trust or fiduciary relationship, for which the following sub-control accounts shall be maintained. Where necessary, separate sub-control accounts shall be maintained for (1) "Tax-Exempt Individual Trust Accounts" that qualify under R.A. No. 8424 (Tax Reform Act of 1997); and (2) "Tax-Exempt Institutional Trust Accounts" such as those opened by foundations, charitable institutions, provident funds, pension funds, tax-exempt government agencies etc., which are qualified to be tax-exempt under existing laws. Excluded are common trust funds, investment management accounts and FCDU/EFCDU trust accounts which are separately classified though arising also from a trust or fiduciary relationship. Administratorship This represents the accountability of the trustee or fiduciary to trustors or principal under property administration agreements or under order of the court of competent jurisdiction to manage and distribute the estate of a decedent without a will or a testator who has no executor. The trustee or fiduciary may be empowered to perform some specific functions, such as enter into contracts of lease, collect rentals due to the property and to pay taxes that may be due. Bond Issue/Other Obligation Under Deed of Trust or Mortgage This represents the accountability of the trustee under a mortgage or collateral trust agreement whereby the properties held by the trustee are used as collateral or are the subject of mortgage for a bond issuer or any other obligation of the bond issuer or borrower. Trustee's responsibility in a mortgage trust indenture may include the issuance of mortgage participation certificates by the trustee to a syndicate of creditors and the performance of certain responsibilities as stated in the trust indenture for the interest of the creditors. The trustee shall maintain memorandum record of the amount of participation of each creditor. Custodianship and Safekeeping This represents the accountability of the trust institution acting as agent of a client under a custodiansship and/or safekeeping agreement. Depositary This represents the accountability of the trustee or agent under agreements whereby the trust institution receives a deposit of money, securities, documents or other evidences of property. A depository arrangement may be in connection with but not limited to: (a) the reorganization, refinancing or any major change in a corporation as when a corporation gets into financial difficulties or when receivership is imminent; and (b) a voting trust agreement where the depositary's duties consist of receiving stock certificates for safekeeping, issuing voting stock certificates, and receiving and distributing dividends for the deposited stock. Employee Benefit Plans Under Trust This represents a corporate trust arrangement where the beneficiaries are employees of an entity. This may be further classified as follows: TSADaI Pension Plan This represents the accountability of the trustee under a pension plan established and maintained by the employer primarily to provide systematically for the payment of definitely determinable benefits to its employees over a period of years usually for life, after retirement. Defined Benefit or Gratuity Plan This represents the accountability of the trustee under a gratuity plan established and maintained by an employer to provide for the payment of definitely determined benefits to its employees after retirement. This plan is similar to a pension, except that the benefits are not payable during a certain period of life of the retiree but totally and immediately after retirement. Provident Fund This represents the accountability of the trustee under agreements whereby the trustee holds funds accumulated from an employer or its employees, or both, to be used for monthly or other periodical payments to retired or incapacitated employees of such employer. Profit Sharing Plan This represents the accountability of the trustee under a profit sharing plan established and maintained by an employer to provide for the participation in profits by its employees or their beneficiaries. Stock Bonus Plan This represents the accountability of the trustee under a stock bonus plan established and maintained by an employer to provide benefits similar to those a profit-sharing plan, except that the contributions by the employer are not necessarily dependent upon the profits and the benefits are distributable in stock of the employer company. Insurance Trust Plan This represents the accountability of the trustee under an insurance trust plan whereby the employees of an entity or their dependents shall receive benefits in case of disability or death of said employees. Revaluation Contra Account Investment in Real Estate This is the reciprocal account of the Employee Benefit Plans Under Trust Real Estate Revaluation Account which represents the difference between the original cost and appraised value of investment in real estate of employee benefit plans held under trust by the trustee in accordance with the policies prescribed by the plans' board of trustees and incorporated in the trust indenture/agreement. Escrow This represents the accountability of an entity (escrow agent) with principal under an escrow agreement or under the order of a court of competent jurisdiction whereby the entity (escrow agent) holds money, securities or property deposited by the principal, the eventual delivery of which to a third party is contingent upon the happening of a certain event or upon the action taken by the second party. Personal Trust This represents the accountability of the trustee to trustor mainly for the administration and disposition of the trustor's general estate or a portion thereof during his lifetime (living trust) or at his death (testamentary trust). The following subsidiary ledgers shall be maintained: Testamentary Trust This is a trust created by a Will . It does not become operative until after the death of the trustor. Under a testamentary trust, a person may transfer legal title to the property to a trustee to hold and manage for the benefit of a third person(s). Living Trust This is trust created by Agreement . It becomes operational during the lifetime of the trustor as soon as the agreement is accomplished. Under a living trust, the trustor (also known as settler) conveys property or a sum of money to be managed by the trustee, as the agreement dictates, for the benefit of the trustor and third person(s) or third person(s) only. However, the trustor cannot create a trust with himself as the sole beneficiary . The functions and authorities of the trustee as defined in the agreement shall include: (1) the purpose or intention of the trust; (2) the nature and value of the property or sum of money that comprise the trust, (3) the trustee's investment powers; (4) the name(s) of the beneficiaries; and (5) the terms and conditions under which the income and/or principal of the trust is to be paid or to be disposed of during the lifetime and ultimately, upon the death of the trustor or upon the occurrence of a specified event(s). A living trust may either be revocable or irrevocable. Liability for Bond Sinking Fund This represents the accountability of the trustee with the trustor for any sinking fund established in connection with the issuance of bonds, commercial papers, redeemable preferred shares or other similar instruments. Legislated, Court and Quasi-Judicial Trust This represents the accountability of the trustee or fiduciary with the trustor or principal under a trust and other fiduciary arrangements mandated by law, executive order, a court or other government regulatory agency such as but not limited to receivership, receiving/custodianship arrangements for IPOs, rights, or offerings. Executorship This represents the accountability for court trust assets held by a trustee designated in a "will" as executor to carry out the testator's last "will" in setting his estate. Guardianship This represents the accountability of the trustee or fiduciary appointed by a court for holding properties or the estate of a minor or an incompetent or irresponsible person. Life Insurance Trust This represents the accountability of the trustee to a trustor under a life insurance trust agreement whereby the trustor makes his life insurance policy payable to the trustee who shall manage and distribute the proceeds thereof in accordance with such agreement. Pre-Need Plans Institutional This represents the accountability of a trustee to a corporate trustor which operates a pre-need plan and is required by a government regulatory agency to maintain a trust account for such activity. Revaluation Contra-Account Investment in Real Estate This is the reciprocal account of the Pre-need Plans Real Estate Revaluation Account which represents the difference between the original cost and the appraised value of investment in real estate of trust accounts opened by a pre-need company in compliance with the Securities and Exchange Commission (SEC) requirements. Individual This represents the accountability of a trustee to a trustor (natural person) who puts up his own fund for the future needs of a beneficiary such as for education, hospitalization, funeral and other expenses. Other Institutional Trust This represents the accountability of the trustee under a trust or other fiduciary arrangement established by institutions, foundations, agencies, whether government or private (e.g., NGOs), registered with the Securities and Exchange Commission or the Cooperative Development Authority, primarily for charitable, religious, educational, athletic, scientific, medical, cultural, specialized lending or developmental project, or such other purposes of similar mature and where no part of the earnings of the account inure to the benefit of a private individual. Voting Trust and Nominee This represents the accountability of the trustee/nominee to the owner of shares of stock in accordance with the terms of the voting trust agreement. Asset-Backed Securities (ABS) Special Purpose Vehicle This represents the accountability of a bank designated as trustee to administer the assets conveyed to a Special Purpose Vehicle by an Originator/Seller for the benefit of holders of asset-backed securities pursuant to a Securitization Plan established in accordance with existing rules and regulations of the appropriate regulatory authorities. The following sub-control accounts representing the type of Special Purpose Vehicle shall be maintained for this account: LexLib a. Investment in Asset-Backed Securities of a Special Purpose Trust b. Investment in Asset-Backed Securities of a Special Purpose Corporation Other Trust/Fiduciary Activities This represents the accountability of the trustee/fiduciary for whatever agreement the nature of which may not be classified under any of the foregoing. b. COMMON TRUST FUNDS This represents the accountability of the trustee under established commingled or common trust plan or any other similar arrangement which partake of the collective investment or the pooled fund nature of common trust fund where the trustee has discretionary authority to invest the commingled fund of participating trustors in assets enumerated in the covering agreement. A sub-control account shall be maintained for "Tax-Exempt Common Trust Fund" representing common trust fund established as tax-exempt under Section 24 (B)(1) of R. A. No. 8424 and Memorandum to All Banks Performing Trust, Other Fiduciary Business and Investment Management Activities dated January 3, 2000. c. INVESTMENT MANAGEMENT ACCOUNTS This represents the accountability of the investment manager under terms provided in an agreement whereby the client who is the principal grants the institution which is the investment manager authority to invest funds in certain assets. The following sub-accounts shall be maintained for this account: 1) Personal Investment Management Accounts where the principal is a natural person. 2) Corporate Investment Management Accounts where the principal is a juridical person. This account shall be further classified as follows: Employee Benefit Plans Under Agency This represents any employee benefit plan of an employer-entity administered by its own board of trustees for which the financial institution is designated as investment manager. These benefit plans may be in the form of pension plan, defined contribution or gratuity plan, provident funds, profit sharing, stock bonus or health insurance, the nature of which, except for the trust relationship, are the same as earlier described under Employee Benefit Plans Under Trust. Other Corporate Investment Management Accounts This represents investment management accounts which may not be classified in the foregoing account. Where necessary, separate sub-control accounts shall be maintained for (1) "Tax-Exempt Individual Investment Management Accounts" that qualify under R A. No. 8424 (Tax Reform Act of 1997); and (2) "Tax-Exempt Institutional Investment Management Accounts" such as those established by foundations, charitable institutions, provident funds, pension funds, tax-exempt government agencies, etc., which are qualified to be tax-exempt under existing laws. d. FCDU/EFCDU TRUST ACCOUNTABILITIES This represents the accountability of a bank as trustee of foreign currencies received in trust under the bank's authority to operate a foreign currency deposit unit or an expanded foreign currency deposit unit for which the following sub-control accounts shall be maintained: 1) FCDU/EFCDU Common Trust Funds representing the accountability of the trustee under an established common trust plan for FCDU/EFCDU funds received as trust account or under any similar arrangement which partake of the collective investment or pooled fund nature of a common trust fund. 2) Individual FCDU/EFCDU Trust Accounts representing the accountability of the trustee under an individual trust agreement of FCDU/EFCDU funds received as trust account. 3) Deferred Items FCDU/EFCDU Revaluation Contra Account This is the reciprocal account of the Accumulated Market Gains/(Losses) which represents amount of unrealized gains or losses arising from the fair market valuation of investment made by the FCDU/EFCDU trust accounts in common trust fund as may be allowed under Subsection X410.4/4410Q.4. It is reversed upon the actual sale or disposition of any such investment. Valuation Principal shall be recorded at the corresponding asset value of the property delivered by the client to the trustee or fiduciary. Income derived from the principal may be closed annually to the principal accountability of the trustee or fiduciary only upon the express written authority from the client or his authorized representative. Expenses and provisions against assets that exceed the outstanding balance of the income accountability shall be deducted from the principal. Amounts booked under Deferred Items FCDU/EFCDU Revaluation Contra Account shall be based on the unrealized gains or losses arising from the fair market valuation of investment. Except for the Deferred Items, all other FCDU/EFCDU Trust Accountabilities shall be recorded at their original foreign currency amount. Financial Statement Presentation Principal shall be the first item among the accountabilities of the trustee or fiduciary. Next to Principal shall be Income or Expenses; followed by Deferred Items. FCDU/EFCDU Trust Accountabilities, other than Deferred Items, shall be presented in the Statement of Condition of the trust department at the original foreign currency amount and at the prevailing US dollar and peso equivalent. In statements and reports to trustors, these accounts are shown at the original foreign currency amount and at the prevailing U.S. dollar equivalent. Deferred Items FCDU/EFCDU Revaluation Contra Account shall be presented in the Statement of Condition of the Trust Department at the foreign currency amount and at the prevailing U.S. dollar and peso equivalent as at reporting date. In the individual statements to trustors, the same presentation shall apply but without showing the prevailing peso equivalent. 2. INCOME This represents the net yield in money or property from the use of the principal. In the case of trustee's Liability to a Special Purpose Vehicle, it may include income generated as a consequence of investment of the asset pool as provided in the trust indenture. Except in the case of "Bond Issue/Other Obligation Under Deed of Trust or Mortgage", "Custodianship and Safekeeping", "Depositary", and "Voting Trust and Nominee", each foregoing Principal accounts shall have a corresponding Income account. The account shall be increased by any of the following: a. Rental of real or personal property b. Interest on money lent or deposited c. Cash dividends on shares of stock other than those where the equity of method of accounting is used d. Share in the income of an investee company under the equity method of accounting. e. Profits from sale of assets f. Earned discounts from purchased bonds or securities g. Sale of the fruits of administered properties The account shall be decreased by any of the following: a. Expenses incurred in connection with the administration, management or preservation of property b. Share in the loss of an investee company under the equity method of accounting c. Losses from sale of assets d. Premium amortization from purchased bonds or securities e. Provision for probable losses or direct write-off of worthless loans, investments and other assets held in trust. f. Tax paid Valuation Income is stated at the amount at which they are collected/paid or to be collected/paid. Income on FCDU/FFCDU Trust Accounts is recorded at the original foreign currency amount. Financial Statement Presentation Income shall be presented immediately after principal. In financial statements and reports to trustors or principals, items added to and deducted from the account shall be adequately explained. Income of FCDU/EFCDU Trust Accounts shall be presented in the Statement of Condition of the trust department at the original foreign currency amount and at the prevailing U.S. dollar and peso equivalent. In statements and reports to trustor, it is presented at the original foreign currency amount and at the prevailing US dollar equivalent. 3. UNEARNED INCOME This represents the unearned portion of interest or discount on loans, bonds and other debt instruments collected in advance which shall be amortized monthly to the income accountability of the trustee/fiduciary for the earned portion. In the case of common trust funds, the amortization to the income accountability shall be in accordance with the established plan of the fund. This represents also unrealized profits from the sale of assets under Sales Contracts Receivable, i.e., sale of foreclosed assets on installment. Upon receipt of payment, the proportionate amount of profits shall be credited to the income accountability of the trustee, fiduciary or investment manager to the client. Financial Statement Presentation The account shall be shown as a separate item among the accountabilities of the trustee or fiduciary. 4. OTHER ACCOUNTABILITIES This represents the accountability of the trustee, fiduciary or investment manager for items or transactions, which cannot be appropriately classified under any of the foregoing accountability accounts. Where appropriate, sub-control accounts may be maintained such as a. Accounts Payable b. Miscellaneous Liabilities Under Deed of Trust or Mortgage This is a sub-account which represents the various liabilities of the trustee in connection with a mortgage or collateral trust indenture that may be in the nature of advances made by creditors to defray expenses of foreclosure proceedings or proceeds from sale or disposition of foreclosed properties held and managed by the trustee or deposit if such depositary function is expressly provided in the indenture. Other related transactions such as income earned from deposits/investments and expenses shall also be recorded/deducted from the account. c. Due to Stock Broker d. Due to BIR e. Subscription Payable f Insurance Premium Payable g. Accrued Expenses Payable Financial Statement Presentation This account shall be shown as a separate item. 5. DEFERRED ITEMS REVALUATION CONTRA ACCOUNT This is the reciprocal account of the Accumulated Market Gains/(Losses) which represents the amount of unrealized gains or losses arising from the fair market valuation of investment made by trust and investment management accounts in shares of stock, and in common trust fund as may be allowed under Subsections X410.4 and 4410Q.4. It is reversed upon the actual sale or disposition of any of such investment. The following sub-control accounts shall be maintained for this account: a. Short-Term Equity Investments b. Investment in Common Trust Fund Valuation Amount booked under this account shall be based on the unrealized gains or losses arising from the fair market valuation of investment. Financial Statement Presentation This item is presented in financial statements and reports to trustors or principals after the Other Accountabilities account. 6. DEFERRED ITEMS CTF REVALUATION CONTRA ACCOUNT This is the reciprocal account of the CTF Revaluation Account which represents the difference between the original cost and the value of investment made by a common trust fund in shares of stock, and real estate based on the valuation method provided in the approved plan for such fund. It is reversed upon the actual sale or disposition of any of such investment. The following sub-control accounts shall be maintained for this account: a. Investment in Shares of Stock for CTF investment in equity shares. b. Investment in Real Estate for CTF investment in real property. Valuation Amount booked under this account shall be based on the valuation method stated in the approved plan for the common trust fund . Financial Statement Presentation This item is presented in financial statements and reports to common trust fund participants after the Common Trust Fund Principal and Income accounts. (BANK PROPER BOOKS) INCOME 1. FEES AND COMMISSIONS This represents fees and commissions earned and collected for services rendered under trust and other fiduciary business and investment management activities. 2. OTHER INCOME This represents other income earned and collected for services rendered under trust and other fiduciary business and investment management activities. TRUST EXPENSES 1. COMPENSATION/FRINGE BENEFITS This represents the salaries and wages, fringe benefits and other expenses of the Trust Department's directors, officers and employees for services rendered in the handling/administration of trust accounts. 2. DEPRECIATION/AMORTIZATION This represents the monthly depreciation of the building, furniture, fixtures and equipment and monthly amortization of leasehold rights and improvements and deferred charges in connection with the handling/administration of trust accounts. 3. MANAGEMENT AND OTHER PROFESSIONAL FEES This represents expenses for services rendered by individuals/firms on a retainer/contractual basis such as legal counsel, external auditors and consultants. 4. TAXES AND LICENSES This represents expenses for taxes and licenses other than income tax incurred in connection with the handling/administration of trust accounts. 5. OTHER EXPENSES a. Rent This represents payments and monthly amortizations of rent for buildings, spaces and/or equipment leased by the Trust Department for its business. b. Power, Light and Water This represents expenses for power, light and water consumption. c. Postage, Telephone, Cables and Telegram This represents expenses for postage, telephone services, cables and telegrams. d. Advertising and Publicity This represents expenses for advertising and publicity such as handbills, pamphlets, billboards, brochures and giveaways. e. Miscellaneous Expenses This represents items which cannot be appropriately classified under any of the foregoing expense accounts. REPORT ON TRUST AND OTHER FIDUCIARY BUSINESS AND INVESTMENT MANAGEMENT ACTIVITIES