Basis of Preparation of the Consolidated Financial Statements Changes in accounting policies in current year

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 516 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

b. Changes in accounting policies in current year continued

b.iv. SFAS 25 Revised 2009 – “Accounting Policies, Changes in Accounting Estimates and Errors” continued Allowance for impairment losses on financial guarantee contracts and commitments continued Determination of allowance for impairment losses on financial guarantee contracts with credit risk and commitments are classified into five categories with the minimum percentage of allowance for impairment losses as follows: Minimum percentage of allowance Classification for impairment losses Pass 1 Special mention 5 Substandard 15 Doubtful 50 Loss 100 The above percentages are applied to commitments and contingencies unused committed loan facilities, letter of credits and bank guarantee, less collateral value, except for commitments and contingencies categorised as pass, where the rates are applied directly to the outstanding balance of commitment and contingencies. Allowance for impairment losses on non-earning assets Starting from 1 January 2011, the Bank determines allowance for possible losses on foreclosed assets and abandoned properties at the lower of the carrying amount and fair value less costs to sell. Prior 1 January 2011, the determination of allowance for impairment losses on foreclosed assets and abandoned properties was calculated by the bank in accordance with Bank Indonesia regulation as follows: Period Current Up to 1 year Substandard More than 1 year up to 3 years Doubtful More than 3 years up to 5 years Loss More than 5 years Starting from 1 January 2011, the Bank determines allowance for impairment losses on inter- office accounts and suspense accounts at the lower of carrying amount and recoverable amount. 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 517 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

b. Changes in accounting policies in current year continued