NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 527 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued G. Allowance for impairment losses of financial assets continued
c Financial guarantee contracts and commitments continued Increase in the liability relating to guarantees is reported as other operating expense in
consolidated statement of comprehensive income. Bank determines impairment losses on financial assets of financial guarantee contracts that
have credit risk and commitment based on the value of the higher of the amortized value carrying value and the present value of the payment of liabilities that are expected to occur
when payment under the guarantee has become probable or value impairment losses were calculated based on historical loss data for a collective evaluation of impairment.
H. Determination of fair value
The fair value of financial instruments traded in active markets, such as marketable securities and Government Bonds, is determined based on quoted market prices at the statement of
financial position date from credible sources such quoted market prices from Bloomberg, Reuters or broker’s quoted price. Investments in mutual fund units are stated at market value, in
accordance with the net value of assets of the mutual funds at the consolidated statement of financial position date.
A financial instrument is regarded as quoted in an active market, if quoted prices are readily and regularly available from an exchange, dealer, broker and those prices represent actual and
regularly occurring market transactions on an arm’s length basis. If the above criteria are not met, the market is regarded as being inactive. Indications that a market is inactive are when
there is a wide bid-offer spread or significant increase in the bid-offer spread or there are few recent transactions.
For marketable securities with no quoted market price, a reasonable estimate of the fair value is determined by reference to the current market value of another instrument which substantially
have the same characteristic or calculated based on the expected cash flows of the underlying net asset base of the marketable securities.
For Government Bonds with no quoted market prices, a reasonable estimate of the fair value is calculated based on the present value of expected future cash flows using next-repricing
method with deflator adjustment.
d. Principles of Consolidation
The consolidated financial statements include the financial statements of Bank Mandiri and its majority-owned or controlled Subsidiaries. Control is presumed to exist where more than 50.00 of
a Subsidiary’s voting power is controlled by Bank Mandiri, or Bank Mandiri is able to govern the financial and operating policies of a Subsidiary, or control the removal or appointment of the majority
of a Subsidiary’s Board of Directors. In the consolidated financial statements, all significant inter- company balances and transactions have been eliminated. Non-controlling interest in net income of
subsidiaries is presented as a deduction of consolidated net income in order to present the Bank’s income. Non-controlling interest in net assets are presented as part of equity in the consolidated
statement of financial position.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 528 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
d. Principles of Consolidation continued
The consolidated financial statements are prepared based on a consistent accounting policy for transactions and events in similar circumstances. The accounting policies adopted in preparing
the consolidated financial statements have been consistently applied by the Subsidiaries, unless otherwise stated.
If the control on an entity is obtained or ends in the current year, the entity’s net income are included in the consolidated statement of income from the date of acquisition of the control or
until the date of the control is ceased.
e. Foreign Currency Transactions and Balances
Subsidiaries and overseas branches Bank Mandiri maintains its accounting records in Indonesian Rupiah. For consolidation purposes,
the financial statements of the overseas branches and overseas subsidiary of Bank Mandiri denominated in foreign currency are translated into Rupiah based on the following bases:
1 Assets and liabilities, commitments and contingencies - using the Reuters spot rates at the
consolidated statement of financial position date. 2
Revenues, expenses, gains and losses - using the average middle rates during each month when the transaction occurs.
3 Shareholders’ equity accounts - using historical rates on the date of transaction.
4 Statements of cash flows - using the Reuters spot rates at the reporting date, except for
income and loss statement balances which are translated using the average middle rates and shareholders’ equity balances which are translated using historical rates.
The resulting net translation adjustment is presented as “Differences Arising from Translation of Foreign Currency Financial Statements” under the Shareholders’ Equity section of the
consolidated statement of financial position.
Transactions and balances in foreign currencies Transactions in currencies other than Rupiah are recorded into Rupiah by using rates on the date
of the transactions. At consolidated statement of financial position date, all foreign currency monetary assets and liabilities are translated into Rupiah using the Reuters spot rates at 4.00
p.m. WIB Western Indonesian Time on 28 December 2012 and 31 December 2011. The resulting gains or losses are credited or charged to the current year’s consolidated statements of
comprehensive income.
The exchange rates used against the Rupiah at the dates of the consolidated statements of financial position are as follows amounts in full Rupiah:
2012 2011
Great Britain Pound Sterling 1Rp 15,514.93
13,975.29 Euro 1Rp
12,731.62 11,714.76
United Stated Dollar 1Rp 9,637.50
9,067.50 Japanese Yen 100Rp
11,177.00 11,682.00
