PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2010, 2009 AND 2008
Expressed in millions of Rupiah, unless otherwise stated
Appendix 514 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
b. Changes in accounting policies in current year continued i. Financial assets and liabilities continued
A. Financial assets continued
a Financial assets at fair value through profit or loss continued A financial asset 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.
Financial instruments included in this category are recognised initially at fair value; transaction costs are taken directly to the consolidated statement of income. Gains and
losses arising from changes in fair value and sales of these financial instruments are included directly in the consolidated statement of income and are reported respectively
as “Unrealised gainslosses from increasedecrease in fair value of financial instruments” and “Gainslosses from sale of financial instruments”. Interest income on
financial instruments held for trading are included in “Interest income”.
b Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market, other than: those that the Group intends to sell immediately or in the short term, which are
classified as held for trading, and those that the Group upon initial recognition designates as at fair value through profit or loss;
those that the Group upon initial recognition designates as available for sale; or those for which the Group may not recover substantially all of its initial investment,
other than because of loans and receivables deterioration. Loans and receivables are initially recognised at fair value plus transaction costs and
subsequently measured at amortised cost using the effective interest rate method. Income on financial assets classified as loans and receivables is included in the
consolidated statement of income and is reported as “Interest income”. In the case of impairment, the impairment loss is reported as a deduction from the carrying value of
the financial assets classified as loan and receivables and recognised in the consolidated statement of income as “Allowance for impairment losses”.
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.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT 31 DECEMBER 2010, 2009 AND 2008
Expressed in millions of Rupiah, unless otherwise stated
Appendix 515 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
b. Changes in accounting policies in current year continued i. Financial assets and liabilities continued
A. Financial assets continued
c Held-to-maturity financial assets continued 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 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 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 initial 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 recognised in the statement of changes in equity, except for impairment losses and foreign exchange gains or losses, 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 in the statement of changes in equity is recognised in the consolidated statement of income. Interest income is calculated using the effective interest method,
and foreign currency gains or losses on monetary assets classified as available for-sale are recognised in the consolidated statement of income.
Recognition The Bank uses trade date accounting for regular way contracts when recording marketable
securities and Government Bonds transactions whilst for other financial assets use settlement date. Financial assets that are transferred to a third party but not qualify for
derecognition are presented in the consolidated balance sheets as “Pledged assets”, if the transferee has the right to sell or repledge them.