NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 514 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
a. Basis of Preparation of the Consolidated Financial Statements continued
All figures in the consolidated financial statements, are rounded and presented in million rupiah Rp unless otherwise stated.
b. Changes in accounting policies
On 1 January 2012, the Group applied new and revised statements of financial accounting standards SFAS and interpretations ISAK effective starting on that date. Changes to the
Group’s accounting policies, in accordance with the transitional provisions in the respective standards and interpretations.
The adaption of the following new or revised standards and interpretations, which are relevant to the Groups operations and resulted in an effect on the consolidated financial statements, are as follows:
b.i. SFAS 60 - Financial Instruments: Disclosures The new standard consolidated and expands a number of existing disclosure requirements and
adds some new disclosures. The over riding principle of the standard is to disclose sufficient information that enables users
of financial statements evaluating the performance and financial position of significant financial instruments owned by an entity. SFAS 60 requires more extensive disclosures on risks and risk
management, and requires reporting entities to report the sensitivity of its financial instruments to movement of such risks. Some additional new disclosures are as follows:
1 Qualitative and quantitative disclosure on the impact of certain risks, including market risk, credit risk and liquidity risk;
2 Additional disclosure for those items that affect the amount of comprehensive income, in which gains and losses are separated by category of financial instruments, and
3 Disclosure of fair value for each class of financial assets and financial liabilities, and disclosure of the fair value hierarchy of financial instruments measured at fair value at the
reporting date. The Group has incorporated disclosures requirements of SFAS No. 60 for the consolidated
financial statements as at and for the year ended 31 December 2012. The Group has decided to early adopt improvements on SFAS 60 refer to Note 65.
b.ii. SFAS 62 - Insurance Contract Several revisions which have impact to the Subsidiary are as follows:
a. The Subsidiary is required to comply with the requirement on unbundling deposit component from insurance component subject to the following:
- Unbundling is required if both the following conditions are met i the Subsidiary can
measure the deposit component including any embedded surrender options separately i.e. without considering the insurance component and ii the Subsidiary’s accounting
policies do not otherwise require it to recognise all obligations and rights arising from the deposit component;
- Unbundling is permitted, but not required, if the Subsidiary can measure the deposit
component separately but its accounting policies require it to recognise all obligations and rights arising from the deposit component, regardless of the basis used to measure
those rights and obligations; and
- Unbundling is prohibited if the Subsidiary cannot measure the deposit component
separately.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 515 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
b. Changes in accounting policies continued
b.ii. SFAS 62 - Insurance Contract continued b. The Subsidiary shall assess at each reporting date whether its recognised insurance
liabilities are adequate, using current estimates of future cash flows under its insurance contract. If the assessment shows that the carrying amount of its insurance liabilities is
inadequate in the light of the estimated future cash flows, the entire deficiency shall be recognised in profit or loss.
c. The Subsidiary presents the value of its reinsurance assets. The Subsidiary has implemented this SFAS 62 and there is no significant impact to the
Subsidiary’s financial statements. b.iii. SFAS 36 Revised 2010 - Accounting for Life Insurance Contract
Several notable revisions which relevant to the Subsidiary are as follows: a.
The Subsidiary is required to calculated the liability for future policy benefits that reflects the present value of estimated payments throughout the guaranteed benefits including all the
embedded options available, the estimated present value of all handling costs incurred and also considering the future premium receipt. If the Subsidiary does not have sufficient data
to perform the calculation, the Subsidiary can use the previous accounting policy.
b. The Subsidiary is required to perform a liability adequacy test in accordance with the
requirements set out in SFAS 62: Insurance Contract. The discount rate used is the best estimate of the discount rate that reflects current conditions and the inherent risk in the
liability.
c. The Subsidiary presents the value of its reinsurance assets.
The Subsidiary has implemented this SFAS 36 Revised 2010 and there is no significant impact to the Subsidiary’s financial statements.
b.iv. Disclosure of related parties Starting 1 January 2012, under Bapepam and LK regulation No. VIII.G.7, attachment of the
Chairman of Bapepam and LK’s decree No. KEP-347BL2012 dated 25 June 2012 on Financial Statements Presentation and Disclosure for Issuers or Public Companies,
Government related Entities are defined as entities under the controls by the Minister of Finance or the Provincial Government who have shares ownership in the Bank.
Prior to 1 January 2012, definition of Government related entities followed SFAS 7 Revised 2010 regarding “Related Party Disclosures” which includes transactions of Government Bonds
and transactions between the Bank with State Owned Enterprises and entities ownedcontrolled by the Government, except for transactions with the Directorate General of Taxation which are
not treated as transactions with related parties.
Comparative information has been restated see Note 54. See Note 2f for definition and accounting policy on transactions with related parties.
b.v. Withdrawal of SFAS 39 PPSAK 11 - Accounting for Joint Operation As at 31 December 2012, the Bank has joint operation in form of Build Operate Transfer BOT
with developer, which will be matured in 2014 and 2016.
