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
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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”.
