PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 537 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 in respect of modification the terms of the loans are recognised only if
the present value of total future cash receipts specified by the new terms of the loans including both receipts designated as interest and those designated as loan principal, are less than the carrying
amount at loans before restructuring. Starting from 1 January 2010, losses on loan restructuring are presented as part of allowance for impairment losses.
For loan restructurings which involve a conversion of loans into equity or other financial instruments, a loss on loan restructuring is recognised 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 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.
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 income at the transaction date.
Subsidiary’s consumer financing receivables are classified as loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
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 provision for doubtful accounts.
Joint financing receivables where the Subsidiary and joint financing providers bear credit risk in accordance with their portion without recourse are presented on a net basis in the consolidated
statement of financial position balance sheet. Consumer financing income and interest expense related to joint financing without recourse are also presented on a net basis in the consolidated
statement of 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”.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 538 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
q. Net Investment in Finance Lease