PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued g. Securities continued
Securities are stated net of allowance for possible losses and unamortized premiums or discount. Premiums and discounts are amortized using the straight-line method.
Securities are derecognized from the consolidated balance sheet after the Bank has transferred all significant risk and rewards of the related securities.
h. Government Bonds
Government Bonds represent bonds issued by the Government of the Republic of Indonesia. Government Bonds are stated based on the classification of the bonds, which accounting treatment is
similar to those of securities as described in Note 2g above. For Government Bonds, which are traded in organized financial markets, fair value is generally
determined by reference to quoted market bid prices by Bloomberg’s and quoted price by broker on the balance sheet date. For Government Bonds where there are no quoted market prices, a
reasonable estimate of the fair value is calculated using the yield-to-maturity approach. Government Bonds was derecognized from the consolidated balance sheet after the Bank has
transferred all significant risk and rewards of the related Government Bonds.
i. Other Receivables - Trade Transactions
Other receivables - trade transactions represent receivables resulting from contracts for trade-related facilities given to customers, which are collectible when due, presented at their outstanding balances,
net of allowance for possible losses.
j. Securities PurchasedSold under ResellRepurchase Agreements
Securities purchased under resell agreements are presented as assets in the consolidated balance sheet at their resale price less unamortized interest and allowance for possible losses. The difference
between the purchase price and the selling price is treated as unrealized unamortized interest income and is recognized as income during the period from the purchase of securities to the date of
resell. Securities sold under repurchase agreements are presented as liabilities in the consolidated balance
sheet at the repurchase price less unamortized interest. The difference between the selling price and the repurchase price is treated as a prepaid expense and is recognized as expense during the period
from the sale of securities to the date of repurchase.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Derivative Receivables and Derivative Payables
All derivative instruments including foreign currency transactions for funding and trading are recognized in the consolidated balance sheet at their fair values. Fair value is determined based on
market value, Reuters spot rate at reporting date, discounted cash flow or quoted price by broker of other instrument with similar characteristic. Derivative assets and liabilities are presented at the
amount of unrealized gains or losses on derivative contracts, net after provision for possible losses. Gains or losses on derivative contracts are accounted for based on the purpose the Bank has
designated upon acquisition as 1 fair value hedge, 2 cash flow hedge, 3 a hedge of a net investment in a foreign operation, and 4 trading instruments, as follows:
1. Gain or loss on a derivative contract designated and qualifying as a fair value hedging instrument, and the gain or loss on the revaluation of hedged assets or liabilities is recognized currently in
profit and loss in the same accounting period. Gains or losses arising from such revaluations may be offset. Any difference that arises representing the effect of hedge ineffectiveness is recognized
currently in consolidated statement of profit and loss.
2. The effective portion of the gain or loss on a derivative contract designated and qualifying as a cash flow hedging instrument is reported as a component of other comprehensive income under
shareholders’ equity. The effect of the hedge ineffectiveness is recognized currently in consolidated statement of profit and loss.
3. Gain or loss on a hedging derivative instrument in a hedge of a net investment in a foreign operation is reported in other comprehensive income as part of the cumulative translation
adjustment under shareholders’ equity to the extent it is effective as a hedge. 4. Gain or loss on a derivative contract not designated as a hedging instrument or derivative contract
that does not qualify as a hedging instrument is recognized in current year’s consolidated statement of profit and loss.
l. Loans
Loans represent receivables under contracts with borrowers, where borrowers are required to repay their debts with interest after a specified period, and matured trade finance facilities which have not
been settled within 15 days. Loans are stated at their outstanding balance less an allowance for possible losses.
Syndicated, direct financing and joint financing, and channeling loans are stated at their balances in proportion to the risks borne by the Bank and its Subsidiaries.
Included in loans are financing by Bank Syariah Mandiri, a subsidiary, in the form of syariah financing which are making funds available or receivables which have the similar forms such as:
a profit sharing transaction in the form of mudharabah and musyarakah b lease transactions in the form of ijarah or lease purchase based on ijarah muntahiya bittamlik
c sale and purchase transaction in the form of murabahah, salam and istishna’ d loanborrowing transaction in the form of receivables qardh and
e lease transactions in the form of ijarah for multiservice transaction
