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 536 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
v. Other Assets continued
Repossessed assets and abandoned properties are presented at their net realisable values. Net realisable value is the fair value of the repossessed assets less estimated costs of liquidating the
repossessed assets. Any excess of the loan balance over the value of the repossessed assets, which is not recoverable from the borrower, is charged to the allowance for impairment losses.
Differences between the estimated realisable value and the proceeds from sale of the repossessed
assets are recognised as current year’s gain or loss at the time of sale. Expenses for maintaining repossessed assets and abandoned properties are recognised in the
current year’s consolidated statement of comprehensive income. The carrying amount of the repossessed assets is impaired to recognise a permanent decrease in value of the repossessed
asset. Any impairment occurred will be charged to the current year’s consolidated statement of comprehensive income. Refer to Note 2t for changes in accounting policy to determine impairment
losses on repossessed assets and abandoned properties. w. Obligation due Immediately
Obligations due immediately are recorded at the time of the obligations occurred from customer or other banks. Obligation due immediately are classified as financial liabilities at amortised cost.
x. Deposits from Customers
Deposits from customers are the funds placed by customers excluding banks with the Bank and Subsidiaries which operate in banking industry based on a fund deposit agreements. Included in this
account are demand deposits, saving deposits, time deposits and other similar deposits. Demand deposits represent deposits of customers that may be used as instruments of payment,
and which may be withdrawn at any time by cheque, automated teller machine card ATM or other orders of payment or transfers.
Saving deposits represent deposits of customers that may only be withdrawn over the counter and via ATMs or funds transfers by SMS Banking, Phone Banking and Internet Banking when certain
agreed conditions are met, but which may not be withdrawn by cheque or other equivalent instruments.
Time deposits represent customers deposits that may only be withdrawn after a certain time based on the agreement between the depositor and the Bank. These are stated at amortised cost in the
certificates between the Bank and the holders of time deposits.
Included in demand deposits are wadiah demand and saving deposits. Wadiah demand deposits can be used as payment instruments and can be withdrawn any time using cheque and bilyet giro.
Wadiah demand and saving deposits earn bonus based on Bank’s policy. Wadiah saving and
demand deposits are stated at the Bank’s liability amount. Deposits from customers are classified as financial liabilities at amortised cost. Incremental costs
directly attributable to acquistion of deposits from customers are included in the amount of deposits and amortised over the expected life of the deposits. Refer to Note 2c for the accounting policy for
financial liabilities at amortised cost.
y. Deposits from Other Banks
Deposits from other banks represent liabilities to local and overseas banks, in the form of demand deposits, saving deposits, inter-bank call money with original maturities of 90 days or less and time
deposits. Deposits from other banks are recorded as liability to other banks.
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 537 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
y. Deposits from Other Banks continued
Included in the deposits from other banks are sharia deposits in form of wadiah deposits, and Certificates Mudharabah Investment Bank SIMA. SIMA is an investment certificate issued by the
BSM which adopts profit sharing practice and in form of placement among banks. SIMA financing period ranges from 1 - 6 months.
Deposits from other banks are classified as financial liabilities at amortised cost. Incremental costs directly attributable to acquistion of deposits from other banks are included in the amount of deposits
and amortised over the expected life of the deposits. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
z. Insurance Contract Insurance contracts is a contract under which the insurer accepts significant insurance risk from the
policyholders. Significant insurance risk is defined as the possibility of paying significantly more benefit to the policyholder upon the occurrence of insured event compared to the minimum benefit
payable in a scenario where the insured event does not occur. Scenarios considered are those with commercial substance.
The Subsidiary issues insurance contracts that accepted siginificant insurance risk from the policyholders. The Subsidiary defines significant insurance risk as the possibility of having to pay
benefits on the occurence of an insured event of at least 10 more than the benefits payable if the insured event did not occur.
Investment contracts are those contracts without significant insurance risk. Once a contract has been classified as an insurance contract, no reclassification is subsequently
performed unless the terms of the agreement are later amended.
The Subsidiary unbundles the deposit component of unit-linked contract when required by SFAS 62 when both the following conditions are met:
- The Subsidiary can measure separately the “deposit” component including any embedded
surrender option, i.e. w ithout taking into account the “insurance” component;
- The Subsidiary’s accounting policies do not otherwise require to recognise all obligations and
rights arising from the “deposit” component. No such condition currently exists within the Subsidiary. In accordance with SFAS 62, the Subsidiary
continues to use the accounting principles previously applied by the Subsidiary related to unit-linked contracts.
Liability adequacy tests Liability adequacy testing is performed at reporting date for contract individually or group of products
determined in accordance with the Subsidiary’s manner of acquiring, servicing and measuring the profitability of its insurance contracts.
For life insurance, the liabilities to policyholder in particular the liabilities for future claim is tested to determine whether they are sufficient to cover all related future cash out flow include all benefit
guaranteed and guaranteed embedded additional benefit, non guaranteed participation benefit feature if any, all the expense for policies issuance and maintaining the policies, as well as
reflecting the future cash inflow, i.e. premium receipt in the future. The liabilities are calculated based on discounted cash flow basis for all related cash flow i.e. both of cash outflow and cash
inflow as mentioned above using a set of most recent best estimate actuarial assumptions which is
set by the Subsidiary’s appointed actuary, include discount rate assumptions, mortalitymorbidity assumptions, lapse assumptions, expense assumptions and inflation assumptions as well as margin
for adverse deviation assumptions.
