PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2014 AND 2013
Expressed in millions of Rupiah, unless otherwise stated
Appendix 534 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Brief explanation for each type of sharia financing is as follows: Mudharabah financing is a co-operation for certain project between first party malik, shahibul mal
or Subsidiary as owner of fund and second party amil, mudharib or debtors as fund manager whereas the profit sharing will be shared in accordance with percentage as stated in the
agreement, meanwhile losses will be borne by the Subsidiary except if the second party does negligence, error or violate the agreement. Mudharabah financing is stated at the outstanding
financing balance less allowance for possible losses.
Musyarakah financing is a co-operation between two or more parties in a certain business wherein each party provides a portion of fund on condition that the profit shall be shared based
on the agreement, whereas losses shall be borne in accordance with the portion of the fund of each party. Permanent musyarakah is musyarakah in which the fund portion of each partner is
stated explicitly in the contract and remains the same until the contract expires. Declining musyarakah musyarakah mutanaqisha is musyarakah in which the fund portion of the Bank will
be transferred in several stages to the other partner, resulting in the declining of fund portion of the Bank and, at the end of contract, the other partner will become the sole owner of the
business. Musyarakah financing is stated at the outstanding financing balance less allowance for possible losses.
Ijarah receivables are the financing on the availability of fund in relation to transferring the right to use and benefit of a good and service based on rental transaction which was not followed by
transfer of the goods ownership to the lessee. Ijarah muntahiyah bittamlik is an agreement on the availability of fund in relation to transferring the use right and benefit of a good or service based
on rental transaction with an option to transfer the ownership title of goods to the lessee. Ijarah receivables are recognised at due date at the amount of it lease income not yet received and
presented at its net realisable value, which is the outstanding balance of the receivables.
Murabahah receivables are the financing of goods by confirming purchase price to a buyer and the buyer pays it with a higher price as an agreed profit. Murabahah receivables are stated at the
balance of the receivable less deferred margin and allowance for possible losses.
Istishna receivables are the financing of goods in the form of manufacturing the ordered goods with the agreed criteria and specification by both of orderer or buyer Mustashni and
manufacturer or seller Shani. Istishna receivables are presented based on the outstanding billings less allowance for possible losses.
Qardh receivables are a borrowing at the condition that the borrower should repay the loan at specified period of time. The Subsidiary will obtain a free ujrah from this transaction, which is
recognised upon receipt. Qardh receivables included Hawalah and Rahn financing agreement. Hawalah is transfer of debts from debtors to other party subsidiary which obligate to bear or
paid.
Rahn represents the mortgage of goods or assets owned by the customer for an equivalent amount of money. Assets or goods mortgaged are appraised based on market value, less a
certain deduction percentage. The Subsidiary will obtain a fee ujrah, which is recognised upon receipt. Qardh receivables is stated at its outstanding balance less allowance for possible losses.
Loans are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2014 AND 2013
Expressed in millions of Rupiah, unless otherwise stated
Appendix 535 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Loan Restructuring Loan restructuring may involve a modification of the terms of the loans, conversion of loans into
equity or other financial instruments andor a combination of both. Losses on loan restructurings due to modification the terms of the loans are recognised as part of
allowance for impairment losses only if the present value of total future cash receipts specified by the new terms of the loans including receipts designated as interest and loan principal, are less
than the carrying amount of loans before restructuring.
For loan restructurings which involve a conversion of loans into equity or other financial instruments, a loss on loan restructuring is recognised as part of allowance for impairment losses
only if the fair value of the equity or financial instruments received, deducted by estimated expenses to sell the equity or other financial instruments, is less than the carrying amount of
loans.
Overdue interest, which is capitalised to loans under new restructuring agreements, is recorded as deferred interest income and is amortised into income proportionately based on the amount of
capitalised interest to the loan principal upon credit collection.
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.
Credit restructuring can be done by over contract, asset relacement, repay back, change the due date, change the tenor andor increase the down payment.
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.
