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 539 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
z. Insurance Contract continued
Liability for future policy benefit continued Funds received from customers for non-sharia unit-linked products are reported as gross premiums
in the consolidated statements of comprehensive income. Liabilities to unit-linked policyholders are recognised in the consolidated statement of financial position computed based on unearned
premium reserves using daily method from the cost of insurance to cover mortality risk plus reserves for the accumulated invested fund of unit-linked policyholders. Prior to 1 January 2013, the liabilities
to unit-linked policyholders are recognised in the statements of financial position computed based on unearned premium reserves using aggregate basis at a minimum 40 of the cost of insurance to
cover mortality risk plus reserves for the accumulated invested fund of unit-lined policyholders. Any interest, gain or loss due to increases or decreases in market value of investments are recorded
as income or expense, with a corresponding recognition of increase in liability to unit-linked policyholders in the consolidated statements of comprehensive income and liability to unit-linked
policyholders in the consolidated statement of financial position. Funds received from customers for unit-linked products is recognised as liabilities to unit-linked
policyholders in the consolidated statement of financial position for the amount received net of the
portion representing the Subsidiary’s fees in managing the unit-linked product revenue.
aa. Marketable Securities Issued
Marketable securities issued by the Bank and its Subsidiaries, include bonds, subordinated notes, medium
term notes and travelers’ cheques, are initially measured at fair value plus directly attributable transaction costs. Subsequently transactions costs are amortised using the effective
interest rate up to the maturity of marketable securities issued. Marketable securities issued are classified as financial liabilities at amortised cost. Refer to Note 2c
for the accounting policy for financial liabilities at amortised cost.
ab. Fund Borrowings
Fund borrowings represent funds received from other banks, Bank Indonesia or other parties with the obligation of repayment in accordance with the requirements of the loan agreement.
Fund borrowings are initially measured at fair value minus directly attributable transaction costs. Fund borrowings are classified as financial liabilities at amortised cost. Refer to Note 2c for the
accounting policy for financial liabilities at amortised cost.
ac. Subordinated Loans
Subordinated loans are initially measured at fair value minus directly attributable transaction costs. Subsequently transactions costs are amortised using the effective interest rate up to the maturity of
subordinated loans. Subordinated loans are classified as financial liabilities at amortised cost. Refer to Note 2c for the
accounting policy for financial liabilities at amortised cost.
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 540 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
ad. Income Tax The tax expense comprises current and deferred tax. Tax is recognised in the consolidated
statement of comprehensive income, except to the extent that it relates to items recognised directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity,
respectively.
Group’s management periodically evaluates the implementation of prevailing tax regulations especially those that are subject to further interpretation on its implementation, including evaluation
on tax assessment letters received from tax authorities. Where appropriate the Bank establishes provisions based on the amounts expected to be paid to the tax authorities.
The balance sheet liability method is applied to determine income tax expense in Bank Mandiri and Subsidiaries. Under the balance sheet liability method, deferred tax assets and liabilities are
recognised for all temporary differences arising between the tax base of assets and liabilities and their carrying amount in the consolidated statement of financial position at each reporting date. This
method also requires the recognition of future tax benefits, to the extent that realisation of such benefits is probable.
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 shareholders’ 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 amount that will be payable to the tax office on probable tax exposure, based on
assessment as at 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 tax assets are presented net of deferred tax liabilities in the consolidated statements of financial position.
ae. Temporary Syirkah Funds
Temporary syirkah funds represent investment received by Subsidiary PT Bank Syariah Mandiri. The Subsidi
ary 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 musytarakah represents mudharabah in which fund manager also submits its
capital or fund in the investment.
