PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 535 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
s. Investments in Shares continued
Temporary investment is written-off from the consolidated statement of financial position if it is held for more than 5 years in accordance with Bank Indonesia Regulation No. 72PBI2005 dated
20 January 2005 on “Asset Quality Ratings for Commercial Banks”, as amended by Bank Indonesia
Regulation No. 112PBI2009 dated 29 January 2009. Since 24 October 2012, Group follows Bank Indonesia Regulation No. 141
5PBI2012 dated 24 October 2012 Regarding “Asset Quality Rating for Commercial Banks”.
Investment in shares with ownership below 20 are classified as financial assets available for sale. Refer to Note 2c for the accounting policy of financial assets available for sale.
Goodwill is recognised, when there is a difference between the acquisition cost and the Bank’s portion of the fair value of identified assets and liabilities at the acquisition date. Goodwill is
presented as other assets. Starting 1 January 2011, with the effective implementation of SFAS No. 22
“Business Combination”, Goodwill arised from acquisition prior to 1 January 2011 is not amortised but subject to regular impairment assessment. Prior to 1 January 2011, Goodwill is amortised as
expense over the period using the straight-line method, unless there is other method considered more appropriate in certain conditions. The Goodwill amortisation period is 5 five years, but a
longer amortisation period may be applied with maximum 20 years period with appropriate basis.
t. Allowance for Possible Losses on Non-Earning Assets Non-
earning assets of Bank Mandiri and the Subsidiaries’ assets consist of repossessed assets, abandoned properties, inter-office accounts and suspense accounts.
The Bank provided an allowance for impairment of collateral confiscated and abandoned property to the value of the lower of carrying amount and fair value net of costs to sell. As for the inter-office
account and suspense account, the value of the lower of carrying value and the recovery value.
u. Acceptance Receivables and Payables
Acceptance receivables are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
Acceptance payables are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
v. Other Assets Other assets include accrued income for interest, provision and commissions, receivables,
repossessed assets, abandoned properties, inter-branch accounts and others. Repossessed assets represent assets acquired by Bank Mandiri and Subsidiaries, both from auction
and non auction based on voluntary transfer by the debtor or based on debtor’s approval to sell the collateral where the debtor could not fulfill their obligations to Bank Mandiri and Subsidiaries.
Repossessed assets represent loan collateral acquired in settlement of loans and is included in “Other Assets”.
Abandoned properties represent Bank and Subsidiaries’ fixed assets in form of property which were
not used for Bank and Subsidiaries’ business operational activity.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2013 AND 2012
Expressed in millions of Rupiah, unless otherwise stated
Appendix 536 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
v. Other Assets continued
Repossessed assets and abandoned properties are presented at their net realisable values. Net realisable value is the fair value of the repossessed assets less estimated costs of liquidating the
repossessed assets. Any excess of the loan balance over the value of the repossessed assets, which is not recoverable from the borrower, is charged to the allowance for impairment losses.
Differences between the estimated realisable value and the proceeds from sale of the repossessed
assets are recognised as current year’s gain or loss at the time of sale. Expenses for maintaining repossessed assets and abandoned properties are recognised in the
current year’s consolidated statement of comprehensive income. The carrying amount of the repossessed assets is impaired to recognise a permanent decrease in value of the repossessed
asset. Any impairment occurred will be charged to the current year’s consolidated statement of comprehensive income. Refer to Note 2t for changes in accounting policy to determine impairment
losses on repossessed assets and abandoned properties. w. Obligation due Immediately
Obligations due immediately are recorded at the time of the obligations occurred from customer or other banks. Obligation due immediately are classified as financial liabilities at amortised cost.
x. Deposits from Customers
Deposits from customers are the funds placed by customers excluding banks with the Bank and Subsidiaries which operate in banking industry based on a fund deposit agreements. Included in this
account are demand deposits, saving deposits, time deposits and other similar deposits. Demand deposits represent deposits of customers that may be used as instruments of payment,
and which may be withdrawn at any time by cheque, automated teller machine card ATM or other orders of payment or transfers.
Saving deposits represent deposits of customers that may only be withdrawn over the counter and via ATMs or funds transfers by SMS Banking, Phone Banking and Internet Banking when certain
agreed conditions are met, but which may not be withdrawn by cheque or other equivalent instruments.
Time deposits represent customers deposits that may only be withdrawn after a certain time based on the agreement between the depositor and the Bank. These are stated at amortised cost in the
certificates between the Bank and the holders of time deposits.
Included in demand deposits are wadiah demand and saving deposits. Wadiah demand deposits can be used as payment instruments and can be withdrawn any time using cheque and bilyet giro.
Wadiah demand and saving deposits earn bonus based on Bank’s policy. Wadiah saving and
demand deposits are stated at the Bank’s liability amount. Deposits from customers are classified as financial liabilities at amortised cost. Incremental costs
directly attributable to acquistion of deposits from customers are included in the amount of deposits and amortised over the expected life of the deposits. Refer to Note 2c for the accounting policy for
financial liabilities at amortised cost.
y. Deposits from Other Banks
Deposits from other banks represent liabilities to local and overseas banks, in the form of demand deposits, saving deposits, inter-bank call money with original maturities of 90 days or less and time
deposits. Deposits from other banks are recorded as liability to other banks.
