PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2010, 2009 AND 2008
Expressed in millions of Rupiah, unless otherwise stated
Appendix 535 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
p. Fixed Assets and Leased Assets
i. Fixed assets Prior to 1 January 2008, fixed assets are stated at cost except for certain fixed assets that were
revalued in 1979, 1987 and 2003 in accordance with Government regulations less accumulated depreciation except for land which is not depreciated. The corresponding revaluation increments
were credited to “Fixed Assets Revaluation Reserve” under the shareholders’ equity in the consolidated balance sheets.
Effective 1 January 2008, Bank Mandiri applied SFAS No. 16 Revised 2007, “Fixed Assets”, which supersedes SFAS No. 16 1994, “Fixed Assets and Other Assets”, and SFAS No. 17
1994, “Accounting for Depreciation”. Bank Mandiri and subsidiaries chose the cost model, and therefore, the balance of fixed assets revaluation reserve at the first time SFAS No. 16 Revised
2007 was presented in shareholders’ equity section in the consolidated balance sheet, were reclassified to consolidated retained earnings in 2008 Note 33c.
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.
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 equipmentsoftware and vehicles
4-5 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 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.
In accordance with SFAS No. 47, “Accounting for Land”, all cost and expense incurred in relation with the acquisition of the landright, such as license fee, survey and measurement cost, notary
fee and taxes, are deferred and presented separately from the cost of the landright. The deferred cost related to the acquisition of the landright was presented as part of Other Asset in the
consolidated balance sheet, and amortised over the period of the related landright using straight- line method.
In addition, SFAS No. 47 also states that landright is not amortised unless it meet certain required conditions.
SFAS No. 48, “Impairment of Assets” states that the carrying amounts of fixed assets are reviewed at each balance sheets date to assess whether they are recorded in excess of their
recoverable amounts and, when carrying value exceeds this estimated recoverable amount, assets are written down to their recoverable amount.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2010, 2009 AND 2008
Expressed in millions of Rupiah, unless otherwise stated
Appendix 536 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
p. Fixed Assets and Leased Assets continued
ii. Leased assets Effective 1 January 2008, the Statement of Financial Accounting Standard SFAS No. 30
Revised 2007, “Leases” supersedes SFAS No. 30 1990 “Accounting for Leases”. Based on SFAS No. 30 Revised 2007, the determination of whether an arrangement is, or contains a
lease is based on the substance of the arrangement at inception date and whether the fulfillment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a
right to use the asset. Under this revised SFAS a lease that transfers substantially all the risk and rewards incidental to ownership of an assets is classified as finance lease. Moreover, leases
which do not transfer substantially the risks and reward incidental to ownership of the leased item are classified as operating leases.
Based on SFAS No. 30 Revised 2007, under a finance leases, Bank and Subsidiaries recognise assets and liabilities in its consolidated balance sheet at amounts equal to the fair value of the
leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Lease payment is apportioned between the finance charge and the
reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the
liability. Finance charges are reflected in the consolidated statement of income. Capitalised leased assets presented under fixed assets are depreciated over the shorter of the estimated
useful life of the assets and the lease term, if there is no reasonable certainty that the Bank will obtain ownership by the end of the lease term.
Under an operating lease, the Bank recognise lease payments as an expense on a straight-line basis over the lease term.
iii.Assets with Build Operate Transfer BOT agreement The Bank’s asset transferred to the investor in the Build, Operate, Transfer BOT agreement will
be re-transferred to the Bank at the end of the concession period. Upon the transfer of the BOT assets from the investor to the Bank, the Bank will record this asset by crediting BOT income if
there is certainty of the economic benefits from the assets or by crediting to deferred income if there is uncertainty of the economic benefits. BOT assets are recorded at fair value or
development costs agreed in the BOT contract or based on the acquisition costs, whichever is objective and reliable.
q. Investments in Shares
Investments in shares represent long-term investments in non-publicly-listed companies and temporary investments in debtor companies arising from conversion of loans to equity.
Investments in shares representing ownership interests of 20.00 to 50.00 are accounted for using the equity method. Under this method, investments are stated at cost and adjusted for the
Bank’s proportionate share in the net equity of the investees and reduced by dividends earned since the acquisition date net of by allowance for impairment losses.
Temporary investments in debtor companies arising from the conversion of loans to equity debt to equity swaps are accounted for using the cost method regardless of the percentage of ownership,
less an allowance for impairment losses.
