PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 517 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued A. Financial assets continued
d Available-for-sale financial assets continued 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 consolidated statement of 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 as part of equity, 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 consolidated statement of comprehensive income 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 comprehensive income.
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 “Pledged assets”, if the transferee has the right to sell or repledge them.
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 income and are reported as
“Unrealised gainslosses from increasedecrease in fair value of financial instruments”. Interest expens
es 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”.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 518 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued B. Financial liabilities continued
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 am
ortisation is recognised as “Interest expense”.
C. Derecognition Financial assets are derecognised when the contractual rights to receive the cash flows from
these assets have ceased to exist or the assets have been transferred and substantially all the risks and rewards of ownership of the assets are also transferred that is, if substantially all the
risks and rewards have not been transferred, the Group tests control to ensure that continuing involvement on the basis of any retained powers of control does not prevent derecognition.
Financial liabilities are derecognised when they have been redeemed or otherwise extinguished. Collateral furnished by the Group under standard repurchase agreements and securities lending
and borrowing transactions is not derecognised because the Group retains substantially all the risks and rewards on the basis of the predetermined repurchase price, and the criteria for
derecognition are therefore not met.
D. Reclassification of financial assets
The Group shall not reclassify any financial instrument out of or into the fair value through profit or loss category while it is held or issued.
The Group shall not classify any financial assets as held-to-maturity if Group has, during the current financial year or during the two preceding financial years, sold or reclassified more than
an insignificant amount of held-to-maturity financial assets before maturity more than insignificant in relation to the total amount of held-to-maturity financial assets other than sales
or reclassifications that:
a are so close to maturity or the financial assets call date that changes in the market rate of interest would not have a significant effect on the financial assets fair value;
b occur after the Group has collected substantially all of the financial asset s original principal
through scheduled payments or prepayments; or c are attributable to an isolated event that is beyond the Groups control, is non-recurring and
could not have been reasonably anticipated by the Group. Reclassification of financial assets from held to maturity classification to available for sale are
recorded at fair value. Unrealised gains or losses are recorded in other comprehensive income component and shall be recognised in the consolidated statement of comprehensive income
until the financial assets is derecognised, at which time the cumulative gain or loss previously recognised in other comprehensive income shall be recognised in consolidated statement of
income under gainloss from sale of financial assets .
