These consolidated financial statements are originally issued in Bahasa.
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
56
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
s. Investments in shares
Investments in shares represent long-term investments in non-publicly-listed companies and temporary investments in debtor companies arising from conversion of loans to equity.
Investments in shares in associated company represent ownership interests of 20.00 to 50.00 are recorded using the equity method. Under this method, investments are recorded at cost and
adjusted for the Bank’s proportionate share in the net equity of the investees and reduced by dividends earned starting the acquisition date net of by allowance for impairment losses.
Temporary investment is written-off from the consolidated statement of financial position if it is held for more than 5 years in accordance with Bank Indonesia Regulation No. 72PBI2005 dated
January 20, 2005 on “Asset Quality Ratings for Commercial Banks”, as amended by Bank Indonesia Regulation No. 112PBI2009 dated January 29, 2009. Since October 24, 2012, Group
follows Bank Indonesia Regulation No. 1415PBI2012 dated October 24, 2012 regarding “Asset Quality Rating for Commercial Banks” and Circular Letter of Bank Indonesia No.1528DPNP dated
July 31, 2013 regarding Asset Quality Ratings for Commercial Banks.
Investment in shares with ownership below 20 are classified as financial assets available for sale. Refer to Note 2c for the accounting policy of financial assets available for sale.
Goodwill is recognised, when there is a difference between the acquisition cost and the Bank’s portion of the fair value of identified assets and liabilities at the acquisition date. Goodwill is
presented as other assets. The Bank conducts an assessment of goodwill impairment regularly.
t. Allowance for possible losses on non-earning assets
Non-earning assets of Bank Mandiri and the Subsidiaries consist of repossessed assets, abandoned properties, inter-office accounts and suspense accounts.
The Bank provided an allowance for impairment of collateral confiscated and abandoned property equivalent to different between carrying amount and fair value net of costs to sell. As for the inter-
office account and suspense account, equivalent to different between carrying value and the recovery value.
u. Acceptance receivables and payables
Acceptance receivables are classified as financial assets in loans and receivables category. Refer to Note 2c for the accounting policy of loans and receivables.
Acceptance payables are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
v. Other assets
Other assets include accrued income for interest, provision and commissions, receivables, repossessed assets, abandoned properties, inter-office accounts and others.
Repossessed assets represent assets acquired by Bank Mandiri and Subsidiaries, both from auction and non auction based on voluntary transfer by the debtor or based on debtor’s approval
to sell the collateral where the debtor could not fulfil their obligations to Bank Mandiri and Subsidiaries. Repossessed assets represent loan collateral that were taken over as part of loans
settlement and presented in “Other Assets”.
These consolidated financial statements are originally issued in Bahasa.
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
57
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
v. Other assets continued
Abandoned properties represent Bank and Subsidiaries’ fixed assets in form of property which were not used for Bank and Subsidiaries’ business operational activity.
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 profit or loss and other comprehensive income. Any
permanent impairment occurred will be charged to the current year’s consolidated statement of profit or loss and other 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 BSM’s policy. Wadiah saving and demand deposits are stated at the Subsidiaries’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.
