NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 541 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
z. Insurance Contract continued
Liability to unit-linked policyholders continued Funds received from customers for non-sharia unit-linked products are reported as gross premiums
in the consolidated statements of comprehensive income. Liabilities to unit-linked policyholders are recognised in the consolidated statement of financial position for the amount received net of the
portion of premium representing the Subsidiary’s revenue, with corresponding income statement recognition for the increase in liabilities to unit-linked policyholders.
Any interest, gain or loss due to increases or decreases in market value of investments are recorded as income or expense, with a corresponding recognition of increase in liability to unit-linked
policyholders in the consolidated statements of comprehensive income and liability to unit-linked policyholders in the consolidated statement of financial position.
Funds received from customers for unit-linked products is recognised as liabilities to unit-linked policyholders in the consolidated statement of financial position for the amount received net of the
portion representing the Subsidiary’s fees in managing the unit-linked product revenue.
aa. Marketable Securities Issued
Marketable securities issued by the Bank and its Subsidiaries, include floating rate notes, medium term notes and travelers’ cheques, are initially measured at fair value plus directly attributable
transaction costs. Subsequently transactions costs are amortised using the effective interest rate up to the maturity of marketable securities issued.
Marketable securities issued are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
ab. Fund Borrowings
Fund borrowings represent funds received from other banks, Bank Indonesia or other parties with the obligation of repayment in accordance with the requirements of the loan agreement.
Fund borrowings are initially measured at fair value minus directly attributable transaction costs. Fund borrowings are classified as financial liabilities at amortised cost. Refer to Note 2c for the
accounting policy for financial liabilities at amortised cost.
ac. Subordinated Loans
Subordinated loans are initially measured at fair value minus directly attributable transaction costs. Subsequently transactions costs are amortised using the effective interest rate up to the maturity of
subordinated loans. Subordinated loans are classified as financial liabilities at amortised cost. Refer to Note 2c for the
accounting policy for financial liabilities at amortised cost.
ad. Income Tax
The tax expense comprises current and deferred tax. Tax is recognised in the consolidated statement of income statement, except to the extent that it relates to items recognised directly in
equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 542 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
ad. Income Tax continued
Group’s management periodically evaluates the implementation of prevailing tax regulations especially those that are subject to further interpretation on its implementation, including evaluation
on tax assessment letters received from tax authorities. Where appropriate the Bank establishes provisions based on the amounts expected to be paid to the tax authorities.
The balance sheet liability method is applied to determine income tax expense in Bank Mandiri and Subsidiaries. Under the balance sheet liability method, deferred tax assets and liabilities are
recognised for all temporary differences arising between the tax base of assets and liabilities and their carrying amount in the consolidated statement of financial position at each reporting date. This
method also requires the recognition of future tax benefits, to the extent that realisation of such benefits is probable.
Currently enacted or substantially enacted tax rates at the time deferred tax assets has been realised or deferred tax liabilities has been settled are used in the determination of deferred income
tax. The changes to the carrying value of deferred tax assets and liabilities due to the changes of tax rates are charged in the current year, except for transactions which previously have been directly
charged or credited to shareholders’ equity.
Amendments to taxation obligations are recorded when an assessment is received or, if appealed against, when the result of the appeal is determined. Management provides provision for future tax
liability at the amount that will be payable to the tax office on probable tax exposure, based on assessment as at the date of consolidated statement of financial position. Assumptions and
estimation used in the provisioning calculation may involve element of uncertainty.
The estimated corporate income tax of Bank Mandiri and Subsidiaries is calculated for each company as a separate legal entity. Current tax assets and current tax liabilities for different legal
entities can not be set-off in the consolidated financial statements. Corporate tax payables and other tax payables of Bank Mandiri and Subsidiaries are presented as taxes payable in the consolidated
statement of financial position. Deferred tax assets are presented net of deferred tax liabilities in the consolidated statements of financial position.
ae. Temporary Syirkah Funds
Temporary syirkah funds represent investment received by Subsidiary PT Bank Syariah Mandiri. The Subsidiary has the right to manage and invest funds in accordance with either the Subsidiary’s
policy or restriction set by the depositors with the agreed profit sharing.
Temporary syirkah funds cannot be classified as liability. This is due to the Subsidiary does not have any liability to return the fund to the owners, except for losses due to the Subsidiary’s management
negligence or misrepresentation. On the other hand, temporary syirkah funds also cannot be classified as equity, because of the existence of maturity period and the depositors do not have the
same rights as the shareholders, such as voting rights and the rights of realized gain from current asset and other non-investment accounts.
Temporary syirkah funds represent one of the consolidated statement of financial position accounts which is in accordance with sharia principle that provide right to the Subsidiary to manage fund,
including to mixing the funds with the other funds.
The owner of temporary syirkah funds receive parts of profit in accordance with the agreement and receive loss based on the proportion to the total funds. The profit distribution of temporary syirkah
funds might be based on profit sharing or revenue sharing concept.
