PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 532 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Loan Restructuring continued Overdue interest, which is capitalised to loans under new restructuring agreements, is recorded as
deferred interest income and is amortised proportionately based on the amount of capitalised interest relative to the loan principal upon collection. Losses on loan restructuring are presented as
part of allowance for impairment losses.
p. Consumer Financing Receivables
Subsidiary’s consumer financing receivables are recognised initially at fair value, added with directly attributable transaction costs and deducted by yield enhancing income, and subsequently measured
at amortised cost using the effective interest rate method.
Subsidiary’s consumer financing receivables are classified as loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
Early termination is treated as a cancellation of an existing contract and the resulting gain or loss is
credited or charged to the current year’s consolidated statement of comprehensive income at the transaction date.
Subsidiary’s unearned consumer financing income is the difference between total installments to be received from customers and the total financing which is recognised as income over the term of the
contract using effective interest rate. Consumer financing receivables are stated net of joint financing receivables where joint financing
providers bear credit risk in accordance with its portion without recourse, unearned consumer financing income and allowance for impairment losses.
Joint financing receivables where jointly financed with other parties, bear credit risk in accordance with their financing portion without recourse and presented on a net basis in the consolidated
statement of financial position. Consumer financing income and interest expense related to joint financing without recourse are also presented on a net basis in the consolidated statement of
comprehensive income. For joint financing without recourse, Subsidiary has the right to set higher interest rates to customers
than those as stated in the joint financing agreements with joint financing providers. The difference
is recognised as revenue and disclosed as “Consumer financing income”.
q. Net Investment in Finance Lease
Net investment in finance lease represent lease receivable plus the residual value at the end of the lease period and stated net of unearned lease income, security deposits and the allowance for
impairment losses. The difference between the gross lease receivable and the present value of the lease receivable is recognised as unearned lease income. Unearned lease income is allocated to
current year consolidated statement of comprehensive income based on a constant rate of return on net investment using the effective interest rate.
The lessee has the option to purchase the leased asset at the end of the lease period at a price mutually agreed upon at the commencement of the agreement.
Early termination is treated as a cancellation of an existing contracts and the resulting gain or loss is credited or charged to the current year consolidated statement of comprehensive income.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 533 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
q. Net Investment in Finance Lease continued
Net investment in finance leases are classified as loans and receivables. Refer to Note 2c to the accounting policy for loans and receivables.
r. Fixed Assets and Leased Assets
i. Fixed assets and Software Fixed assets except for land is stated at cost less accumulated depreciation and impairment
losses. Such cost includes the cost of replacing part of the fixed assets when that cost is incurred, if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs that do not have future economics benefit
are recognised in the consolidated statement of income as incurred. Software is recognised as intangible assets.
Depreciation and amortisation is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Years Buildings
20 Furniture, fixtures, office equipment and computer and vehicles
4-5 Software
5 Fixed assets are derecognised upon disposal or when no future economic benefits are expected
from their use or disposal. Any gain or loss arising from derecognition of the asset calculated as the difference between the net disposal proceeds and the carrying amount of the asset is
included in consolidated statement of comprehensive income in the year the asset is derecognised.
The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each financial year end.
Construction in progress is stated at cost and is presented as part of fixed assets. Accumulated costs are reclassified to the appropriate fixed assets account when the assets are substantially
complete and are ready for their intended use. Prior to January 1, 2012, the land assets are recorded in accordance with SFAS 47, Accounting
for Land, all costs and expenses incurred in connection with the acquisition of land rights, among others, the cost, the cost of survey and measurement, notary fees and taxes associated with it,
are deferred and presented separately from the cost of land acquisition. Cost of acquiring land rights are deferred are presented as part of Other Assets in the consolidated statements of
financial position and is amortised over the useful life of the relevant land rights using the straight- line method.
In addition, SFAS 47 also states that the right to land is not amortised unless it meets certain conditions specific.
Starting 1 January 2012, SFAS 47 has been revoked and replaced by PSAK 16 “Fixed Assets”. Starting 1 January 2012, in accordance with IAS 16 Fixed Assets and ISAK 25 Land Rights.
The cost of land rights in the form of right to cultivate, right to build and use rights are recognised as fixed assets. The acquisition cost is the cost that are directly attributable to obtain land rights,
including the cost of legal rights to the land when the land was first acquired. Land rights in the form of right to cultivate, right to build and use rights are not depreciated, unless
there is evidence to indicate that the extension or renewal of land is likely to or definitely not obtained.
