Derivative Receivables and Derivative Payables continued

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 DECEMBER 2010, 2009 AND 2008 Expressed in millions of Rupiah, unless otherwise stated Appendix 535 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

p. Fixed Assets and Leased Assets

i. Fixed assets Prior to 1 January 2008, fixed assets are stated at cost except for certain fixed assets that were revalued in 1979, 1987 and 2003 in accordance with Government regulations less accumulated depreciation except for land which is not depreciated. The corresponding revaluation increments were credited to “Fixed Assets Revaluation Reserve” under the shareholders’ equity in the consolidated balance sheets. Effective 1 January 2008, Bank Mandiri applied SFAS No. 16 Revised 2007, “Fixed Assets”, which supersedes SFAS No. 16 1994, “Fixed Assets and Other Assets”, and SFAS No. 17 1994, “Accounting for Depreciation”. Bank Mandiri and subsidiaries chose the cost model, and therefore, the balance of fixed assets revaluation reserve at the first time SFAS No. 16 Revised 2007 was presented in shareholders’ equity section in the consolidated balance sheet, were reclassified to consolidated retained earnings in 2008 Note 33c. Fixed assets except for land is stated at cost less accumulated depreciation and impairment losses. Such cost includes the cost of replacing part of the fixed assets when that cost is incurred, if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs that do not have future economics benefit are recognised in the consolidated statement of income as incurred. Depreciation and amortisation is calculated using the straight-line method over the estimated useful lives of the assets as follows: Years Buildings 20 Furniture, fixtures, office equipment and computer equipmentsoftware and vehicles 4-5 Fixed assets are derecognised upon disposal or when no future economic benefits are expected from their use or disposal. Any gain or loss arising from derecognition of the asset calculated as the difference between the net disposal proceeds and the carrying amount of the asset is included in consolidated statement of income in the year the asset is derecognised. The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each financial year end. Construction in progress is stated at cost and is presented as part of fixed assets. Accumulated costs are reclassified to the appropriate fixed assets account when the assets are substantially complete and are ready for their intended use. In accordance with SFAS No. 47, “Accounting for Land”, all cost and expense incurred in relation with the acquisition of the landright, such as license fee, survey and measurement cost, notary fee and taxes, are deferred and presented separately from the cost of the landright. The deferred cost related to the acquisition of the landright was presented as part of Other Asset in the consolidated balance sheet, and amortised over the period of the related landright using straight- line method. In addition, SFAS No. 47 also states that landright is not amortised unless it meet certain required conditions. SFAS No. 48, “Impairment of Assets” states that the carrying amounts of fixed assets are reviewed at each balance sheets date to assess whether they are recorded in excess of their recoverable amounts and, when carrying value exceeds this estimated recoverable amount, assets are written down to their recoverable amount.