PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
y. Securities Issued
Securities issued are securities issued in the form of Medium Term Notes MTN and Bonds.
Medium term notes are classified as financial liabilities measured at amortized cost using the effective interest method. Transaction costs that are directly attributable to the
acquisition of securities issued are deducted from the amount of securities issued Note 2h.
z. Financial Guarantee Contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a loss incurred because a specified debtor defaulted
to make payments when due, in accordance with the terms of a debt instrument. Such financial guarantees are given from Group to bank, financial institutions and other
institutions on behalf of customers to secure loans and other banking facilities. Initial recognition of financial guarantees in the consolidated financial statements is
recognized at fair value at the time the guarantee is given. The fair value of financial guarantee at the time of the transaction is generally equal to the premium received,with
normal terms and conditions, and the initial fair value is amortized over the life of financial guarantee.
Subsequently, these contracts are measured at the higher of amortized amount and the present value of any expected payment when a payment under the guarantee has become
probable and the difference is charged to other operating expense in the consolidated statement of comprehensive income.
aa. Stock Issuance Costs
Stock issuance costs are deducted from the additional paid-in capital portion of the related proceeds from issuance of shares and are not amortized.
ab. Revenue and Expense Recognition
1. Recognition of Interest Revenues, Interest Expense, Sharia Revenue, and Revenue
Sharing Distribution Interest Revenue and Interest Expense
Interest income and interest expense for all financial instruments are recognized in the consolidated statement of comprehensive income on accrual basis using the effective
interest rate method. Transaction costs incurred and are directly attributable to the acquisition or issuance of
financial instruments not measured at fair value through profit and loss are amortized over the life of financial instruments using the effective interest rate method and
recorded as part of interest income for transaction costs, directly attributable to financial assets, and as part of interest expense for transaction costs related to
financial liabilities.
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PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
If a financial asset or group of similar financial assets in the category are held to maturity, loans and receivables, and available for sale are impaired, the interest income
earned after the impairment loss is recognized using the interest rate used for discounting future cash flows in calculating impairment losses.
Revenue and ExpenseSharia Profit Sharing
Revenue consists of income from murabahah sharia, income from muntahiyah bittamlik ijarah lease, and profit sharing from mudharabah financing.
Murabahah and revenue from ijarah muntahiyah bittamlik are recognized over the contract period on an accrual basis. Revenues for the results of financing are
recognized when received or within the period of entitlement based on profit sharing agreement.
Expense based on sharia consists of profit sharing expense of mudharabah, wadiah bonus expense and profit sharing expense of Certificate of Sharia Interbank
Mudharabah Investment.
2. Recognition of Insurance Underwriting Income and Expenses
Underwriting Income Premiums on insurance contracts short-term period contracts are recognized as
revenue over the policy contract period in proportion to the insurance coverage provided. Premiums on long-term insurance contracts are recognized as revenue on
due date of policyholders. Premiums received prior to the issuance of insurance policies is recorded as Policyholders’ deposit AJSM and deferred premium income
ASM. Gross reinsurance premiums are recognized as an expense when payable or on the
effective date of the policy. Claims Expense
Claims consist of settled claims, claims in process, claims incurred but not reported and claims settlement expense. Claims are recognized as expense when the obligation
to settle the claims incurred. The portion of claims received from reinsurance are recognized and recorded as deduction from claims expenses in the same period when
the claims expenses are recognized. Subrogation rights are recognized as deduction from claims expenses at the time of realization.
Claims in process estimated claims are computed based on estimated loss which at consolidated statements of financial position date are still in process, including claims
incurred but not reported. Commission Expense
Commission due to insurance brokers, agents and other insurance companies in connection with the insurance coverage are recorded as commission expense,
whereas commissions obtained from reinsurance transactions are recorded as commission income and recognized in the consolidated statements of comprehensive
income when earned.
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