NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 517 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments A. Financial assets
The Group classifies its financial assets in the following categories of a financial assets at fair value through profit and loss, b loans and receivables, c held-to-maturity financial assets, and
d available-for-sale financial assets. The classification depends on the purpose for which the financials assets were acquired. Management determines the classification of its financial assets
at initial recognition.
a Financial assets at fair value through profit or loss This category comprises two sub-categories: financial assets classified as held for trading,
and financial assets designated by the Group as at fair value through profit or loss upon initial recognition.
A financial asset is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio of identified
financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Derivatives are also categorised as held for trading
unless they are designated and effective as hedging instruments.
A financial asset designated as fair value through profit or loss at inception are held to back the insurance liabilities of Subsidiary measured at fair value of the underlying assets.
Financial instruments included in this category are recognised initially at fair value; transaction costs are taken directly to the consolidated statement of income. Gains and
losses arising from changes in fair value and sales of these financial instruments are included directly in the consolidated statement of income and are reported respectively as
“Unrealised gainslosses from increasedecrease in fair value of financial instruments” and “Gainslosses from sale of financial instruments”. Interest income on financial
instruments held for trading are included in “Interest income”.
b Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market, other than: -
those that the Group intends to sell immediately or in the short term, which are classified as held for trading, and those that the Group upon initial recognition designates as at fair
value through profit or loss; -
those that the Group upon initial recognition designates as available for sale; or -
those for which the Group may not recover substantially all of its initial investment, other than because of loans and receivables deterioration.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 518 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued A. Financial assets continued
b Loans and receivables continued Loans and receivables are initially recognised at fair value plus transaction costs and
subsequently measured at amortised cost using the effective interest rate method. Income on financial assets classified as loans and receivables is included in the consolidated
statement of income and is reported as “Interest income”. In the case of impairment, the impairment loss is reported as a deduction from the carrying value of the financial assets
classified as loan and receivables and recognised in the consolidated statement of income as “Allowance for impairment losses”.
c Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the Group has the positive intention and ability to hold to maturity, other than:
- those that the Group upon initial recognition designates as at fair value through profit or
loss; -
those that the Group designates as available for sale; and -
those that meet the definition of loans and receivables. Held-to-maturity financial assets are initially recognised at fair value including transaction
costs and subsequently measured at amortised cost, using the effective interest method. Interest income on held-to-maturity financial assets is included in the consolidated statement
of income and reported as “Interest income”. In the case of impairment, the impairment loss is reported as a deduction from the carrying value of the investment and recognised in the
consolidated financial statements as “Allowance for impairment losses”.
d Available-for-sale financial assets Available-for-sale are financial assets that are intended to be held for indefinite period of
time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and receivables, held-to-maturity or
financial assets at fair value through profit or loss.
Available-for-sale financial assets are initial recognised at fair value, plus transaction costs, and measured subsequently at fair value with gains or losses arising from the changes in
fair value being recognised in the consolidated statement of comprehensive income, except for impairment losses and foreign exchange gains or losses for debt instrument, for equity
instrument, foreign exchange gains or losses is recognised as part of equity, until the financial assets is derecognised. If an available-for-sale financial asset is determined to be
impaired, the cumulative unrealised gain or loss arising from the changes in fair value previously recognised in the consolidated statement of comprehensive income is recognised
in the consolidated statement of income. Interest income is calculated using the effective interest method, and foreign currency gains or losses on monetary assets classified as
available for-sale are recognised in the consolidated statement of comprehensive income.
