(NAR) VOL. 18 NO. 1/JANUARY - MARCH 2007
“1. Real and other properties acquired (ROPA) in settlement of loans through foreclosure or dation in payment shall be booked under the ROPA account as follows:i. Upon entry of judgment in case of judicial foreclosure;
ii. Upon execution of the Sheriff’s Certificate of Sale in case of extrajudicial foreclosure; and
iii. Upon notarization of the Deed of Dacion in case of dation in payment
(dacion en pago).
Real and other properties acquired shall be booked initially at the carrying amount of the loan (i.e., outstanding loan balance adjusted for any unamortized premium or discount less allowance for credit losses computed based on PAS 39 provisioning requirements, which take into account the fair value of the collateral) plus booked accrued interest less allowance for credit losses (computed based on PAS 39 provisioning requirements) 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 property): Provided, That if the carrying amount of ROPA exceeds P5 million, the appraisal of the foreclosed/purchased asset shall be conducted by an independent appraiser acceptable to the BSP.”