PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 514 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h. Marketable Securities continued
2 Marketable securities classified as available for sale securities are stated at fair value. Unrealised gains or losses from changes in fair value are not recognised in the current year’s
consolidated statement of income but are presented as a separate component in equity section. Gains or losses are recognised in consolidated statement of income upon realisation.
3 Marketable securities classified as held to maturity securities are stated at cost adjusted for unamortised discounts or premiums.
For marketable securities which are actively traded in organised financial markets, fair value is generally determined by reference to quoted market prices by the stock exchanges at the close of
business on the balance sheet date. For marketable securities with no quoted market price, a reasonable estimate of the fair value is determined by reference to the current market value of
another instrument which substantially have the same characteristic or calculated based on the expected cash flows of the underlying net asset base of the marketable securities. Any permanent
decline in the fair value of marketable securities classified as held to maturity and available for sale is charged to current year’s consolidated statement of income.
Purchase and sale of marketable securities transactions both for the customer and for the Bank are recognised in the consolidated financial statements at the transaction date trade date.
Reclassification of marketable securities to held to maturity classification from available for sale are recorded at fair value. Unrealised gains or losses are recorded in the equity section and will be
amortised up to the remaining live of the marketable securities using the effective interest rate method.
Reclassification of marketable securities to held to maturity classification from trading are recorded at fair value. Unrealised gains or losses are charged to the consolidated statements of income on
the date of reclassification.
Marketable securities are stated net of allowance for possible losses and any unamortised premiums or discount. Premiums and discounts are amortised using the effective interest rate
method.
Marketable securities are derecognised from the consolidated balance sheet after the Bank has fully transferred all significant risk and rewards of the related marketable securities.
i. Government Bonds
Government Bonds represent bonds issued by the Government of the Republic of Indonesia. Government Bonds consist of Government Bonds from the recapitalisation program and
Government Bonds purchased from the market. Government Bonds are stated based on the classification of the bonds, in accordance with accounting treatment of marketable securities as
described in Note 2h above.
For Government Bonds, which are actively traded in financial markets, the fair value is generally determined by reference to Bloomberg’s quoted market prices or broker’s quoted price on the
balance sheet date. For Government Bonds with no quoted market prices, a reasonable estimate of the fair value is calculated using next re-pricing method approach with deflator adjustment.
Government Bonds are derecognised from the consolidated balance sheet at the time the Bank has fully transferred all significant risk and rewards of the related Government Bonds.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 515 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued j.
Other Receivables - Trade Transactions
Other receivables - Trade Transactions represent receivables resulting from contracts for trade- related facilities given to customers, which will be reimbursed on maturity. They are presented at
their outstanding balances, net of allowance for possible losses.
k. Securities PurchasedSold under ResaleRepurchase Agreements
Securities purchased under resale agreements are presented as assets in the consolidated balance sheet at the agreed resale price less unamortised interest income and allowance for possible
losses. The difference between the purchase price and the agreed selling price is treated as deferred unamortised interest income and amortised as income over the period, commencing from
the acquisition date to the resale date.
Securities sold under repurchase agreements are presented as liabilities in the consolidated balance sheet at the agreed repurchase price less unamortised prepaid interest. The difference
between the selling price and the agreed repurchase price is treated as prepaid interest and is recognised as an expense over the period, commencing from the selling date to the repurchase
date.
l. Derivative Receivables and Derivative Payables
All derivative instruments including foreign currency transactions for funding and trading purposes are recognised in the consolidated balance sheet at their fair values. Fair value is determined based
on market value using Reuters rate at reporting date or discounted cash flow.
Derivative receivables are presented at the amount of unrealised gain from derivative contracts, less allowance for possible losses. Derivative payables are presented at the amount of unrealised
loss from derivative contracts.
Gains or losses from derivative contracts are presented in the consolidated financial statements based on its purpose designated upon acquisition, as 1 fair value hedge, 2 cash flow hedge, 3
net investment in a foreign operation hedge, and 4 trading instruments.
1. Gain or loss on a derivative contract designated and qualifying as a fair value hedging
instrument and the gain or loss arising from the changes in fair value of hedged assets and liabilities is recognised as gain or loss that can be set off one another during the same
accounting period. Any difference representing hedge ineffectiveness is directly recognised as gain or loss in the consolidated statement of income in current year.
2. The effective portion arising from gain or loss of derivative contracts, which are both designated
and qualify as a cash flow hedge instruments is reported as other comprehensive income, a separate component under the equity section. The hedge ineffectiveness portion is recognised
as a gain or loss in the current year consolidated statement of income.
3. Gain or loss arising from derivative contract that is designated, qualifies as a net investment
hedge in a foreign operation and that is highly effective is reported as other comprehensive income, a separate component under the equity section.
4. Gain or loss arising from derivative contract not designated as a hedging instrument or
derivative contract that does not qualify as a hedging instrument is recognised in the current year consolidated statement of income.
