PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 538 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
q. Net Investment in Finance Lease
Net investment in finance lease is a finance lease receivable plus the amount of residual value to be received at the end of the lease financing decreased by unearned lease income, security deposits
and the allowance for doubtful accounts. The difference between the gross lease receivable and the present value of the lease receivables is recognized as unearned lease income. Unearned lease
income is allocated to current year consolidated statement of income based on a constant rate of return on net investment using the effective interest rate.
The lessee have the right financing option to purchase the leased asset at the end of the lease period at a price mutually agreed upon at the commencement of the agreement.
Early termination is treated as a cancellation of an existing contracts and the resulting gain or loss is credited or charged to the current year consolidated statement of income at the transaction date.
Net investment in finance leases are classified as loans and receivables. Refer to Note 2c to the accounting policy for loans and receivables.
r. Fixed Assets and Leased Assets
i. Fixed assets Fixed assets except for land is stated at cost less accumulated depreciation and impairment
losses. Such cost includes the cost of replacing part of the fixed assets when that cost is incurred, if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs that do not have future economics benefit
are recognised in the consolidated statement of income as incurred.
Depreciation and amortisation is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Years Buildings
20 Furniture, fixtures, office equipment and computer equipmentsoftware and vehicles
4-5 Fixed assets are derecognised upon disposal or when no future economic benefits are expected
from their use or disposal. Any gain or loss arising from derecognition of the asset calculated as the difference between the net disposal proceeds and the carrying amount of the asset is
included in consolidated statement of income in the year the asset is derecognised.
The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each financial year end.
Construction in progress is stated at cost and is presented as part of fixed assets. Accumulated costs are reclassified to the appropriate fixed assets account when the assets are substantially
complete and are ready for their intended use.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 539 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
r. Fixed Assets and Leased Assets continued
i. Fixed assets continued In accordance with SFAS No. 47, “Accounting for Land”, all cost and expense incurred in relation
with the acquisition of the landright, such as license fee, survey and measurement cost, notary fee and taxes, are deferred and presented separately from the cost of the landright. The deferred cost
related to the acquisition of the landright was presented as part of Other Asset in the consolidated statement of financial position balance sheet, and amortised over the period of the related
landright using straight-line method.
In addition, SFAS No. 47 also states that landright is not amortised unless it meet certain required conditions.
SFAS No. 48, “Impairment of Assets” states that the carrying amounts of fixed assets are reviewed at each consolidated statement of financial position balance sheet date to assess
whether they are recorded in excess of their recoverable amounts and, when carrying value exceeds this estimated recoverable amount, assets are written down to their recoverable amount.
ii. Leased assets Bank Mandiri to apply SFAS No. 30 Revised 2007 of the Lease, effective beginning on or after 1
January 2008. Under SFAS No. 30 Revised 2007, determination of whether an agreement is a lease agreement or lease agreement containing the substance of the agreement based on the
inception date and whether the fulfillment of the agreement depends on the use of an asset and the agreement provides a right to use the asset. According to this revised SFAS, leases that
transfer substantially all the risks and rewards incidental to ownership, are classified as finance leases. Further, a lease is classified as operating leases, if the lease does not transfer
substantially all the risks and benefits incidental to ownership of assets.
Based on SFAS No. 30 Revised 2007, under a finance leases, Bank and Subsidiaries recognise assets and liabilities in its consolidated statement of financial position balance sheet at amounts
equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease. Lease payment is apportioned between
the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Finance charges are reflected in the consolidated statement of income. Capitalised leased assets presented under fixed assets are depreciated over the shorter
of the estimated useful life of the assets and the lease term, if there is no reasonable certainty that the Bank will obtain ownership by the end of the lease term.
Under an operating lease, the Bank recognise lease payments as an expense on a straight-line basis over the lease term.
iii.Assets with Build Operate Transfer BOT agreement The Bank’s asset transferred to the investor in the Build, Operate, Transfer BOT agreement will
be re-transferred to the Bank at the end of the concession period. Upon the transfer of the BOT assets from the investor to the Bank, the Bank will record this asset by crediting BOT income if
there is certainty of the economic benefits from the assets or by crediting to deferred income if there is uncertainty of the economic benefits. BOT assets are recorded at fair value or
development costs agreed in the BOT contract or based on the acquisition costs, whichever is objective and reliable.
