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
c. Assessment of Insurance Contract Liability Life Insurance and Loss Insurance
Liability for Future Policy Benefits Liability for future policy benefits represents the present value of estimated future policy
benefits to be paid to policyholders or their heirs less present value of estimated future premiums to be received from the policyholders, recognized in correlation with the
recognition of premium income. Liabiility for future policy benefits is stated in the consolidated statement of financial position in accordance with the actuarial calculation.
Increase or decrease in liability for future policy benefits is recognized in the current year consolidated statement of comprehensive income.
The liability for life insurance contracts is calculated either based on current assumptions or on assumptions established at inception of the contract, reflecting the best estimate at the
time increased with a margin for risk and adverse devition. Valuation of liabilities to policyholders reflects management’s best current estimate of future cash flows.
The main assumptions used related to mortality, morbidity, expenses, lapse and surrender rates and discount rates. The Group bases mortality and morbidity on standard Indonesian
industry mortality tables which reflect historical experiences, adjusted when appropriate to reflect the Group’s unique risk exposure, product characteristics, target markets and own
claims severity and frequency experiences. Estimates are also made as to future investment income arising from the asset-backed life
insurance contracts. These estimates are based on current market returns as well as expectations about future economic and financial developments.
Assumptions on future expense are based on current expense levels, adjusted for expected expense inflation if appropriate.
Discount rate is based on current industry risk rates, adjusted for the Group’s own risk exposure.
Estimated Claim Liabilities
Estimated claims liability represents amounts set aside to provide for the outstanding and incurred claims arising from insurance policies in force during the accounting period.
Management’s judgment is required to determine the amount of estimated claims liability based on guidelines from Minister of Finance of Republic of Indonesia.
The carrying value of liability for future policy benefit and estimated claim liability are disclosed in Notes 25 and 26.
d. Long-term Employee Benefits
The determination of the obligation and long-term employee benefits is dependent on the selection of certain assumptions used by actuary in calculating such amounts. Those
assumptions are described in Note 47 and include, among others, discount rate and rate of salary increase. Actual results that differ from the Group’s assumptions are accumulated
and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. While it is believed that the Group’s
assumptions are reasonable and appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the amount of long-term employee
benefits liability.
The carrying value of long-term employee benefits is disclosed in Note 47.
- 48 -
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
e. Deferred Tax Assets
Deferred tax assets are recognized for all temporary differences between the financial statements’ carrying amounts of existing assets and liabilities and their respective taxes
bases to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilized. Significant management estimates are required to
determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.
The carrying value of deferred tax assets is disclosed in Note 48.
f. Impairment of Non-Financial Assets
Impairment review is performed when certain impairment indicators are present. Determining the fair value of assets requires the estimation of cash flows expected to be
generated from the continued use and ultimate disposition of such assets. Any significant changes in the assumptions used in determining the fair value may materially affect the
assessment of recoverable values and any resulting impairment loss could have a material impact on results of operations.
The carrying value of these assets in form of investment in shares at acquisition cost, investment properties, property and equipment, and foreclosed properties are as disclosed
in Notes 17, 18, 19 and 20.
4. Cash and Cash in Banks
These consist of:
2014 2013
Cash on hand Rupiah
324,054 347,327
Foreign currencies Note 51 49,244
30,897 Total - cash on hand
373,298 378,224
Cash in banks Third parties
Rupiah PT Bank Mayapada Internasional Tbk
144,140 40
Standard Chartered Bank, Indonesia 97,133
723 PT Bank Central Asia Tbk
46,134 37,603
PT Bank International Indonesia Tbk - Sharia Division 21,793
46,575 PT Bank Negara Indonesia Persero Tbk
10,385 9,198
PT Bank CIMB Niaga Tbk 9,256
4,669 PT Bank Internasional Indonesia Tbk
7,943 15,773
PT Bank Permata Tbk 6,150
119,355 PT Bank CIMB Niaga Tbk - Sharia Division
4,745 5,181
PT Bank Mandiri Persero Tbk 3,667
6,350 PT Bank Mega Tbk
78 8,647
Others below Rp 5,000 each 15,243
17,493 Total
366,667 271,607
- 49 -