PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated
65
14. PREMISES AND EQUIPMENT continued
a. In accordance with the Decrees of the Minister of Finance KMK No. 211KMK.032003 dated May 14, 2003 and No. S-206MK.012003 dated May 21, 2003, Bank Mandiri engaged PT Vigers
Hagai Sejahtera, a registered appraisal company, to revalue the premises and equipment of the merged banks, BBD, BDN, Bank Exim and Bapindo as of July 31, 1999, in relation to the transfer to
Bank Mandiri of tax losses of these taxpayers which transferred assets to Bank Mandiri.
Based on PT Vigers Hagai Sejahtera’s Valuation Report No. Ref-020-IVHSV03 dated May 26, 2003, the value of premises and equipment of the Bank and the corresponding increment in value as
of July 31, 1999 were as follows:
Fixed Assets Market Value
Book Value Increment in Value
Land and buildings 4,427,510
843,414 3,584,096
Furniture, fixtures and equipment 438,086
275,370 162,716
Vehicles 19,604
355 19,249
4,885,200 1,119,139
3,766,061
PT Vigers Hagai Sejahtera’s opinion of the market value was based on “Indonesian Appraisal Standards” issued by the Indonesian Appraisal Companies Association GAPPI and the Indonesian
Society of Appraisers MAPPI. In arriving at the market values, PT Vigers Hagai Sejahtera has taken into consideration the market
data approach and cost approach valuation methodologies. The results of the revaluation have been approved by the Directorate General of Taxation through
Kepala Kantor Pelayanan Pajak Perusahaan Negara and Daerah through its Decision Letter No. Kep- 01WPJ.07KP.01052003 dated June 18, 2003.
Bank Mandiri has recorded the results of the revaluation on June 18, 2003, the date of approval from the Directorate General of Taxation, after deducting the relevant accumulated depreciation for the
period from August 1, 1999 to June 18, 2003. The net increment of premises and equipment of Rp3,046,936, involved land, buildings, vehicles and office equipment.
The recognition of the premises and equipment revaluation increment did not impact the Bank’s tax expense position, as the tax losses used to compensate the premises and equipment revaluation
increment had not been recognized as deferred tax assets by the Bank.
b. Bank Mandiri and Subsidiaries have insured their premises and equipment excluding land against physical loss; fire, theft and natural disaster with PT Staco Jasapratama, PT Asuransi Raya,
PT Asuransi Dharma Bangsa, PT Asuransi Takaful Umum, PT Asuransi Jasindo Takaful and PT Asuransi Jasa Indonesia for total coverage amounts of Rp1,849,743 and US140,874,300.65 full
amount as of December 31, 2007 and Rp3,218,254 and US174,357,150.76 full amount as of December 31, 2006. Management believes that the insurance coverage is adequate to cover the
possibility of losses arising in relation to premises and equipment.
15. OTHER ASSETS
2007 2006
Accrued income 1,672,638
1,661,130 Others
3,487,895 3,302,295
5,160,533 4,963,425
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2007 and 2006 Expressed in millions of Rupiah, unless otherwise stated
66
15. OTHER ASSETS continued
Accrued Income Accrued income primarily comprises accrued interest receivable from placements, securities, Government
Bonds, loans, and accrued fees and commissions. Others
2007 2006
Rupiah: Receivables from customer transactions
1,050,521 713,357
Abandoned properties - net of accumulated losses arising from difference in net realizable value of Rp29,248 and Rp28,762
as of December 31, 2007 and 2006 304,845
416,167 Prepaid expenses
274,418 303,804
Repossessed assets - net of accumulated losses arising from difference in net realizable value of Rp10,451 and Rp10,451
as of December 31, 2007 and 2006 186,953
188,094 Interbranch account - net
125,141 201,152
Prepaid taxes 7,043
7,356 Interest receivables from financial institutions
1,186 254,004
Others 972,119
1,630,052 Total Rupiah
2,922,226 3,713,986
Foreign Currency: Prepaid expenses
19,800 21,041
Receivables from customer transactions 15,152
16,052 Interest receivables from financial institutions
- 17,601
Others 1,143,355
528,318 Total Foreign Currency
1,178,307 583,012
Total 4,100,533
4,296,998 Less: Allowance for possible losses
612,638 994,703
3,487,895 3,302,295
Receivables from customer transactions primarily consist of securities transactions from PT Mandiri Sekuritas a Subsidiary.
Prepaid expenses consist of payments made in advance mostly relating to housing rental, building maintenance and prepayment for customer guarantee program to Lembaga Penjamin Simpanan LPS.
Movement of allowance for possible losses on other assets are as follows:
2007 2006
Balance at beginning of year 994,703
427,225 Provision during the year Note 37
73,424 53,663
Reversal during the year Note 37 281,496
- Reclassification during the year
133,290 -
Settlement during the year 46,513
- Write offs during the year
5,076 -
Others 10,886
513,815
Balance at end of year 612,638
994,703
Includes effect of foreign currency translation.
Management believes that the allowance for possible losses is adequate to cover possible losses from other assets.
