PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued ad. Income tax continued
Currently enacted or substantially enacted tax rates at the time deferred tax assets has been realised or deferred tax liabilities has been settled are used in the determination of deferred
income tax. The changes to the carrying value of deferred tax assets and liabilities due to the changes of tax rates are charged in the current year, except for transactions which previously have
been directly charged or credited to equity. Amendments to taxation obligations are recorded when an assessment is received or, if appealed
against, when the result of the appeal is determined. Management provides provision for future tax liability at the estimated amount that will be payable to the tax office if there is a probable tax
exposure, based on management’s assessment as of the date of consolidated statement of financial position. Assumptions and estimation used in the provisioning calculation may involve
element of uncertainty. The estimated corporate income tax of Bank Mandiri and Subsidiaries is calculated for each
company as a separate legal entity. Current tax assets and current tax liabilities for different legal entities can not be set-off in the consolidated financial statements. Corporate tax payables and
other tax payables of Bank Mandiri and Subsidiaries are presented as taxes payable in the consolidated statement of financial position.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net
basis.
ae. Temporary syirkah funds
Temporary syirkah funds represent investment received by Subsidiary PT Bank Syariah Mandiri. The Subsidiary has the right to manage and invest funds in accordance with either the Subsidiary’s
policy or restriction set by the depositors with the agreed profit sharing. Relationship between the Subsidiary and the owner of temporary syirkah funds are based on
partnership mudharabah muthlaqah, mudharabah muqayyadah or musyarakah. The examples of temporary syirkah funds are investment funds received from mudharabah muthlaqah, mudharabah
muqayyadah, mudharabah musytarakah and other similar accounts. 1 Mudharabah muthlaqah represents mudharabah in which the fund owner shahibul maal
entrusts to fund manager mudharibSubsidiary in managing its investment. 2 Mudharabah muqayyadah represents mudharabah in which the fund owner sets restrictions
against fund manager regarding, among others, the place, the means andor the object of investment.
3 Mudharabah muqayyadah represents mudharabah in which fund manager also submits its capital or fund in the investment.
Temporary syirkah funds cannot be classified as liability because the Subsidiary does not have any liability to return the fund to the owners, except for losses due to the Subsidiary’s management
negligence or misrepresentation. On the other hand, temporary syirkah funds also cannot be classified as equity, because of the existence of maturity period and the depositors do not have the
same rights as the shareholders, such as voting rights and the rights of realised gain from current asset and other non-investment accounts.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
63
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued ae. Temporary syirkah funds continued
Temporary syirkah funds represent one of the consolidated statement of financial position accounts which is in accordance with sharia principle that provide right to the Subsidiary to
manage fund, including to mixing the funds with the other funds. The owner of temporary syirkah funds receive parts of profit in accordance with the agreement and
receive loss based on the proportion to the total funds. The profit distribution of temporary syirkah funds might be based on profit sharing or revenue sharing concept.
af. Interest and sharia income and expense
i Conventional Interest income and expense for all interest-bearing financial instruments are recognised as
“interest income” and “interest expense” in the consolidated statement of profit or loss and other comprehensive income using the effective interest method.
The effective interest method is a method of calculating the amortised cost of financial assets and liabilities and allocating method the interest income or interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows
considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all commissions, provision and other fees received between
parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised on the non-impaired portion of the
impaired financial assets using the rate of interest used to discount the future cash flows for measuring the impairment loss.
ii Sharia income Included in interest income and expense are sharia income and expense. The Subsidiarys
income as a fund manager mudharib consists of income from murabahah and istishna transactions, income from ijarah leasing, income from profit sharing of mudharabah and
musyarakah financing and other main operating income. Murabahah income through deferred payment or installment is recognised during the period of
the contract based on effective method annuity. According to SFAS No.102 Revised 2013, murabahah income which includes deferred
margin and administrative income are recognised as income using the effective rate of return method, which is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into
account all contractual terms of the financial assets and includes any fees or incremental costs that are directly attributable to the assets and are an integral part of the effective financing
rate.
