Obligation due Immediately FS Bank Mandiri Tbk 311211 Eng 1 Final opini
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 544 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
ac. Subordinated Loans
Subordinated loans are initially measured at fair value plus directly attributable transaction costs. Subsequently transactions costs are amortised using the effective interest rate up to the maturity of
subordinated loans. Subordinated loans are classified as financial liabilities at amortised cost. Refer to Note 2c for the
accounting policy for financial liabilities at amortised cost.
ad. Income Tax
The tax expense comprises current and deferred tax. Tax is recognised in the consolidated statement of income statement, except to the extent that it relates to items recognised directly in
equity.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Where appropriate it establishes provisions
based on the amounts expected to be paid to the tax authorities.
The balance sheet liability method is applied to determine income tax expense in Bank Mandiri and Subsidiaries. Under the balance sheet liability method, deferred tax assets and liabilities are
recognised for all temporary differences arising between the tax base of assets and liabilities and their carrying amount in the consolidated statement of financial position balance sheet at each
reporting date. This method also requires the recognition of future tax benefits, to the extent that realisation of such benefits is probable.
Currently enacted or substantially enacted tax rates at the time deferred tax assets has been realised or deferred tax liabilities has been settled are used in the determination of deferred income
tax. The changes to the carrying value of deferred tax assets and liabilities due to the changes of tax rates are charged in the current year, except for transactions which previously have been directly
charged or credited to shareholders’ equity.
Amendments to taxation obligations are recorded when an assessment is received or, if appealed against, when the result of the appeal is determined. Management provides provision for future tax
liability at the amount that will be payable to the tax office on probable tax exposure, based on assessment as at the date of consolidated statement of financial position balance sheet. Significant
assumptions and estimation used in the provisioning calculation may involve element of uncertainty.
The estimated corporate income tax of Bank Mandiri and Subsidiaries is calculated for each company as a separate legal entity. Current tax assets and current tax liabilities for different legal
entities can not be set-off in the consolidated financial statements. Corporate tax payables of Bank Mandiri and Subsidiaries are presented as current tax payables in the consolidated statement of
financial position balance sheet, whilst other tax payables are presented as obligation due immediately refer to Note 2b.b.i regarding changes in accounting policy. Deferred tax assets are
presented net of deferred tax liabilities in the consolidated balance sheets.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 545 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
ae. Temporary Syirkah Funds
Temporary syirkah funds represent investment received by Subsidiary PT Bank Syariah Mandiri. The Subsidiary has the right to manage and invest funds in accordance with either the Subsidiary’s
policy or restriction set by the depositors with the agreed profit sharing.
Temporary syirkah funds cannot be classified as liability. This is due to the Subsidiary does not have any liability to return the fund to the owners, except for losses due to the Subsidiary’s management
negligence or misrepresentation. On the other hand, temporary syirkah funds also cannot be classified as equity, because of the existence of maturity period and the depositors do not have the
same rights as the shareholders, such as voting rights and the rights of realized gain from current asset and other non-investment accounts.
The owner of temporary syirkah funds receive parts of profit in accordance with the agreement and receive loss based on the proportion to the total funds. The profit distribution of temporary syirkah
funds might be based on profit sharing or revenue sharing concept.
af. Interest and Sharia Income and Expense
i Conventional Interest income and expense for all interest-bearing financial instruments are recognised within
“interest income” and “interest expense” in the consolidated statement of income using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate,
a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual
terms of the financial instrument but does not consider future credit losses. The calculation includes all fees, commissions and other fees received between parties to the contract that are
an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised on the non-impaired portion of the impaired
financial assets using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss.
ii Sharia income Included in interest income and expense are sharia income and expense. The Subsidiariess
income as a fund manager mudharib consists of income from murabahah and istishna transactions, income from ijarah leasing, income from profit sharing of mudharabah and
musyarakah financing and other main operating income.