Cash and Cash in Banks

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 Marketable securities are initially measured at fair value plus directly attributable transaction costs. For securities measured at fair value through profit and loss, the transaction costs are directly charged to profitloss. Investment in Sukuk 1. Investment in sukuk measured at cost Investment in sukuk is initially measured at cost, including transaction costs. The difference between the acquisition cost and the nominal value is amortized on a straight-line basis over the term of the sukuk. If indication of impairment exists then the amount of impairment loss is measured as the difference between the recoverable amount of sukuk and its carrying value. 2. Investment in sukuk measured at fair value Investment in sukuk is measured at cost, excluding transaction costs. After initial recognition, the difference between the fair value and the carrying amount is recognized in the consolidated statement of comprehensive income.

j. Consumer Financing Receivables

Consumer financing is financing activity for procurement of goods based on the needs of consumer with payment by installments. Consumer financing receivables are categorized as loans and receivable and are stated at amortized cost less allowance for doubtful accounts see Note 2h. Interest income is recognized based on the effective interest rate method. In relation to joint consumer financing transactions and channeling of consumer financing receivables with other parties, the Group’s responsibility is to collect and administer the transferred consumer financing receivables. The difference between the interest charged to the customers by the Group and the interest charged by the investors is recognized as income by the Group and directly credited to the “Consumer financing income” account in the consolidated statements of comprehensive income. In joint financing and credit channeling transactions on a with recourse basis, the Group recognizes assets or liabilities in its books. In joint financing and credit channeling transactions on a without recourse basis, the assets are presented at net amounts in the consolidated statements of financial position. Receivables are deemed uncollectible if the debtors are unable to pay and, and have been delinquent for more than 90 to 120 days. The Group repossesses the collateral – vehicle if the consumers had not made payments despite issuance of two collection letters. When the collateral - vehicle has been repossessed from the consumers, the consumer financing receivables are written off. The repossessed vehicle is stated at the lower of the carrying value of consumer finance receivables or net realizable values. Any difference between the carrying amount and net realizable value is recorded as the allowance for impairment loss and normally charged to operations in the year such costs are incurred. In the settlement of receivables, the consumer authorizes the Group to sell the vehicle or perform other actions in case of breach of the financing agreement. If the selling price of the vehicle is lower than the collateral value of financing receivables, the difference is charged to the consolidated statement of comprehensive income. - 30 -