PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated
20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
f. Placements with Bank Indonesia and Other Banks Placements with Bank Indonesia and other banks represent placements in the form of BI deposit
facility FASBI, call money, “fixed-term” placements, time deposits and others. Placements with Bank Indonesia are stated at the outstanding balances, net of the unamortized
interest. Placements with other banks are stated at the outstanding balances, net of allowance for possible losses.
g. Securities Securities consist of securities traded in the money market such as, Certificates of Bank Indonesia
SBI, Wadiah Certificates of Bank Indonesia SWBI, Surat Perbendaharaan Negara SPN, Negotiable Cerfiticates of Deposits, medium term notes, floating rate notes, promissory notes,
Treasury Bills issued by other country government and Republic of Indonesia’s government including yankee bonds, mandatory convertible bond, export bills, securities traded on the capital market such
as mutual fund units and securities traded on the stock exchanges such as shares of stocks and bonds include Syariah Mudharabah bonds.
Investments in mutual fund units are stated at market value, which is the net value of assets of the mutual funds at the balance sheet date. Any unrealized gains or losses at the balance sheet date are
reflected in the current year’s consolidated income or loss. The value of securities is stated based on the classification of the securities, as follows:
1 Trading securities are stated at fair value. The unrealized gainsincome resulting from the
increasedecrease in fair value are recognized in the current year’s income and loss. Upon the sale of securities in a trading portfolio, the difference between selling price and fair value per
books is recognized as a realized gain or loss on sale. 2 Available for sale securities are stated at fair value. Unrealized gainslosses resulting from the
increasedecrease in fair value are not recognized in the current year’s income and loss but are presented as a separate component of shareholders’ equity. Gainslosses are recognized in
income and loss upon realization. 3 Held to maturity securities are stated at cost adjusted for unamortized discounts or premiums.
For securities which are actively traded in organized financial markets, fair value is generally determined by reference to quoted market bid prices by the stock exchanges at the close of business
on the balance sheet date, adjusted for transaction costs necessary to realize the assets. For securities where there is no quoted market price, a reasonable estimate of the fair value is determined
by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of securities. Any
permanent decline in the fair value of securities held to maturity and available for sale is charged to income and loss in the year incurred.
Purchase and sale of securities transactions both for the customer and for the Bank are recognized in the consolidated financial statements when there is an agreement on securities transactions.
Securities are stated net of allowance for possible losses and unamortized interestpremium or discount. Premiums and discounts are amortized using the straight-line method.
Securities are derecognized from the balance sheet after the Bank has transferred all significant risk and rewards of the related securities.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
