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- 36 -Notes to Consolidated Financial Statements The carrying value of the transportation equipment under finance lease agreements amounted to = P2.5 million and = P4.0 million as of December 31, 2013 and 2012, respectively (see Notes 13 and 20). Obligation under finance lease amounted to P =2.5 million and = P3.8 million as of December 31, 2013 and 2012, respectively (see Note 20). Classification of Financial Instruments. The Group exercises judgments in classifying a financial instrument on initial recognition either as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial asset, a financial liability or an equity instrument. The substance of a financial instrument, rather than its legal form, governs its classification in the consolidated balance sheet. In addition, the Group classifies financial assets by evaluating, among others, whether the asset is quoted or not in an active market. Included in the evaluation on whether a financial asset is quoted in an active market is the determination on whether the quoted prices are readily and regularly available, and whether those prices represent actual and regularly occurring market transactions on an arm’s length basis. AFS investments classified as current assets amounted to = P785.6 million and = P1,166.3 million as of December 31, 2013 and 2012, respectively. AFS investments classified as noncurrent assets amounted to = P29,316.5 million and = P23,416.0 million as of December 31, 2013 and 2012, respectively (see Note 11). Determination of Control or Joint Control over an Investee Company. Control is presumed to exist when an investor has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. On the other hand, joint control is presumed to exist when the investors contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The Group has assessed it has control over its subsidiaries and joint control in all joint arrangements. Classification of Joint Arrangements. The Group’s investment in ABCC is accounted for as an investment in a joint venture since it has the rights to the net assets of the joint arrangement. The joint venture agreements with BSP and Akean Resorts Corporation are accounted for as joint operations since the parties that have joint control of the arrangements have rights to the assets, and obligations for the liabilities, relating to the arrangements (see Note 4). Determination of BSP Share. Based on the current planned allocation in determining the 15% share of BSP on the Project, BSP’s share consists of the BSP convention center located at the third floor of the Podium and a portion of Tower Three and parking spaces. Prior to 2013, BSP’s share consists of the BSP convention center and a portion of Tower One and Two. Investments in Associates. The Group has a 50% interest in Alphaland Heavy Equipment Corporation (AHEC) and ASRI (2012 only). The Group accounts for these investments as associates since management has assessed that there is no joint control between the parties. Transfers of Investment Properties. The Group transfers to investment properties after determining that there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another party or ending of construction or development. Transfers are also made from investment properties when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale. These transfers are recorded using the carrying amount of the investment properties at the date of change in use. 81

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