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 532 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Loan Restructuring continued Overdue interest, which is capitalised to loans under new restructuring agreements, is recorded as
deferred interest income and is amortised proportionately based on the amount of capitalised interest relative to the loan principal upon collection. Losses on loan restructuring are presented as
part of allowance for impairment losses.
p. Consumer Financing Receivables
Subsidiary’s consumer financing receivables are recognised initially at fair value, added with directly attributable transaction costs and deducted by yield enhancing income, and subsequently measured
at amortised cost using the effective interest rate method.
Subsidiary’s consumer financing receivables are classified as loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
Early termination is treated as a cancellation of an existing contract and the resulting gain or loss is
credited or charged to the current year’s consolidated statement of comprehensive income at the transaction date.
Subsidiary’s unearned consumer financing income is the difference between total installments to be received from customers and the total financing which is recognised as income over the term of the
contract using effective interest rate. Consumer financing receivables are stated net of joint financing receivables where joint financing
providers bear credit risk in accordance with its portion without recourse, unearned consumer financing income and allowance for impairment losses.
Joint financing receivables where jointly financed with other parties, bear credit risk in accordance with their financing portion without recourse and presented on a net basis in the consolidated
statement of financial position. Consumer financing income and interest expense related to joint financing without recourse are also presented on a net basis in the consolidated statement of
comprehensive income. For joint financing without recourse, Subsidiary has the right to set higher interest rates to customers
than those as stated in the joint financing agreements with joint financing providers. The difference
is recognised as revenue and disclosed as “Consumer financing income”.
q. Net Investment in Finance Lease
Net investment in finance lease represent lease receivable plus the residual value at the end of the lease period and stated net of unearned lease income, security deposits and the allowance for
impairment losses. The difference between the gross lease receivable and the present value of the lease receivable is recognised as unearned lease income. Unearned lease income is allocated to
current year consolidated statement of comprehensive income based on a constant rate of return on net investment using the effective interest rate.
The lessee has the 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 comprehensive income.
