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 514 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
a. Basis of Preparation of the Consolidated Financial Statements continued
Consolidated statements of cash flows are prepared using the direct method by classifying cash flows in operating activities, investing and financing activities.
The financial statements of a Subsidiary company engaged in sharia banking have been prepared in conformity with the Statement of Financial Accounting Standards SFAS 101, “Presentation of
Financial Statement for Sharia Banking”, SFAS 102 “Accounting for Murabahah”, SFAS 104 “Accounting for Istishna”, SFAS 105 ”Accounting for Mudharabah”, SFAS 106 “Accounting for
Musyarakah ”, SFAS 107 “Accounting for Ijarah”, SFAS 110 “Accounting for Sukuk” Accounting
Guidelines for Indonesian Sharia Banking PAPSI and other Statements of Financial Accounting Standards established by the Indonesian Institute of Accountants and also accounting and reporting
guidelines prescribed by the Indonesian banking regulatory authority and Bapepam and LK. The preparation of financial statements in accordance with Indonesian Financial Accounting
Standards requires the use of estimates and assumptions. It also requires management to make judgments in the process of applying the accounting policies the Group. The area that is complex or
requires a higher level of consideration or areas where assumptions and estimates could have a significant impact on the consolidated financial statements as disclosed in Note 3.
All figures in the consolidated financial statements, are rounded and presented in million rupiah Rp unless otherwise stated.
b. Changes in accounting policies On 1 January 2013, the Group implemented new statements of financial accounting standards
SFAS and the withdrawal of SFAS and revision, effective starting on that date. Changes to the Group’s accounting policies has been made, in accordance with the transitional provisions in the
respective standards and interpretations. Implementation of the new or revised standards, which are relevant to the Groups operations and
have impacts on the consolidated financial statements, are as follows:
b.i. SFAS 60 - Financial Instruments: Disclosures On 19 October 2012, Financial Accounting Standard Board of Indonesian Accountant Institute
DSAK-IAI issued enhancement to the SFAS 60 which became effective on 1 January 2013. Early implementation of the enhancements was permitted. The Group has decided to early
adopt SFAS 60 in the financial year ended 31 December 2012, and therefore it has no impact to the financial statements for the year ended 31 December 2013.
The enhancements mainly relate to the disclosure of financial assets, including the withdrawal of requirements to disclose:
1
Fair value of collateral held as security for financial assets both “past due but not yet impaired” and “impaired”; and,
2 Carrying amount of financial asset that are neither past due nor impaired whose terms have been renegotiated.
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 515 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
b. Changes in accounting policies continued
b.ii. SFAS 38 - Entities Under Common Control Business combination transaction amongst entities under common control, in form of transfer of
business conducted for the purpose of reorganisation of entities under common control, does not represent a change of ownership in terms of economic substance, therefore, there shall be
no gain or loss recognised by the group as a whole and by individual entities within the group. Since the business combination transaction amongst entities under common control does not
cause a change in economic substance of ownership of the transferred business, therefore the transaction is recognised at book value using the pooling interest method.
The entity that accepts or releases a business in a combination or separation of business amongst entities under common control, shall recognise the difference between benefits being
transferred or received and the recorded amount of every business combination transaction as equity and present it under additional paid-in capitalagio.
b.iii. Unearned Premium Reserves UPR Since 1 January 2013, t
he Bank’s subsidiary AXA Mandiri Financial Services change its accounting policy in calculating unearned premium reserve from aggregate method at a
minimum 40 of net premiums into daily basis method. The impact of changes in accounting policy is not significant
to the Group’s consolidated financial statements, therefore it is charged to current year statement of comprehensive income, and the consolidated financial statements
for the year ended 31 December 2012 were not restated.
c. Financial instruments A. Financial assets
The Group classifies its financial assets in the following categories of a financial assets at fair value through profit and loss, b loans and receivables, c held-to-maturity financial assets, and
d available-for-sale financial assets. The classification depends on the purpose for which the financials assets were acquired. Management determines the classification of its financial
assets at initial recognition.
a Financial assets at fair value through profit or loss This category comprises two sub-categories: financial assets classified as held for trading,
and financial assets designated by the Group as at fair value through profit or loss upon initial recognition.
A financial asset is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio of identified
financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Derivatives are also categorised as held for trading
unless they are designated and effective as hedging instruments.
A financial asset designated as fair value through profit or loss at inception are held to back the insurance liabilities of Subsidiary measured at fair value of the underlying assets.
