PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2014 AND 2013
Expressed in millions of Rupiah, unless otherwise stated
Appendix 518 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued A. Financial assets continued
c Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity, other than:
- those that the Group upon initial recognition designates as at fair value through profit
or loss; -
those that the Group designates as available for sale; and -
those that meet the definition of loans and receivables. Held-to-maturity financial assets are initially recognised at fair value including transaction
costs and subsequently measured at amortised cost, using the effective interest method. Interest income on held-to-maturity financial assets is included in the consolidated
statement of comprehensive income and reported as “Interest income”. In the case of impairment, the impairment loss is reported as a deduction from the carrying value of the
investment and recognised in the consolidated financial statements as “Allowance for impairment losses”.
d Available-for-sale financial assets Available-for-sale financial assets are financial assets that are intended to be held for
indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and receivables, held-
to-maturity or financial assets at fair value through profit or loss.
Available-for-sale financial assets are initially recognised at fair value, plus transaction costs, and measured subsequently at fair value with gains or losses arising from the
changes in fair value being other comprehensive income, except for impairment losses and foreign exchange gains or losses for debt instrument. For equity instrument, foreign
exchange gains or losses is recognised in the consolidated profit or loss, until the financial assets is derecognised. If an available-for-sale financial asset is determined to
be impaired, the cumulative unrealised gain or loss arising from the changes in fair value previously recognised as other comprehensive income is recognised in the consolidated
profit or loss. Interest income is calculated using the effective interest method.
Recognition The Bank uses trade date accounting for regular way contracts when recording marketable
securities and Government Bonds transactions. Financial assets that are transferred to a third party but not qualify for derecognition are presented in the consolidated statement of
financial position as “receivables from assets pledged as collateral”, if the transferee has the right to sell or repledge them.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2014 AND 2013
Expressed in millions of Rupiah, unless otherwise stated
Appendix 519 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued B. Financial liabilities
The Group classified its financial liabilities in the category of a financial liabilities at fair value through profit or loss and b financial liabilities measured at amortised cost. Financial
liabilities are derecognised from the consolidated statement of financial position when redeemed or otherwise extinguished.
a Financial liabilities at fair value through profit or loss This category comprises two sub-categories: financial liabilities classified as held for
trading, and financial liabilities designated by the Group as at fair value through profit or loss upon initial recognition.
A financial liability is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio of
identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Derivatives are also categorised as
held for trading unless they are designated and effective as hedging instruments.
Gains and losses arising from changes in fair value of financial liabilities classified held for trading are included in the consolidated statement of comprehensive income and are
reported as “Unrealised gainslosses from increasedecrease in fair value of financial instruments”. Interest expenses on financial liabilities held for trading are included in
“Interest expenses”.
If the Group designated certain debt securities upon initial recognition as at fair value through profit or loss fair value option, then this designation cannot be changed
subsequently. According to SFAS 55, the fair value option is applied on the debt securities consists of debt host and embedded derivatives that must otherwise be
separated.
Fair value changes relating to financial liabilities designated at fair value through profit or loss are recognised in “Gainslosses from changes in fair value of financial instruments”.
b Financial liabilities at amortised cost Financial liabilities at amortised cost are initially recognised at fair value minus
transaction costs. After initial recognition, Group measures all financial liabilities at amortised cost using
effective interest rates method. Effective interest rate amortisation is recognised as “Interest expense”.
