Government Bonds Securities PurchasedSold under ResaleRepurchase Agreements
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 514 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h. Marketable Securities continued
2 Marketable securities classified as available for sale securities are stated at fair value. Unrealised gains or losses from changes in fair value are not recognised in the current year’s
consolidated statement of income but are presented as a separate component in equity section. Gains or losses are recognised in consolidated statement of income upon realisation.
3 Marketable securities classified as held to maturity securities are stated at cost adjusted for unamortised discounts or premiums.
For marketable securities which are actively traded in organised financial markets, fair value is generally determined by reference to quoted market prices by the stock exchanges at the close of
business on the balance sheet date. For marketable securities with no quoted market price, a reasonable estimate of the fair value is determined by reference to the current market value of
another instrument which substantially have the same characteristic or calculated based on the expected cash flows of the underlying net asset base of the marketable securities. Any permanent
decline in the fair value of marketable securities classified as held to maturity and available for sale is charged to current year’s consolidated statement of income.
Purchase and sale of marketable securities transactions both for the customer and for the Bank are recognised in the consolidated financial statements at the transaction date trade date.
Reclassification of marketable securities to held to maturity classification from available for sale are recorded at fair value. Unrealised gains or losses are recorded in the equity section and will be
amortised up to the remaining live of the marketable securities using the effective interest rate method.
Reclassification of marketable securities to held to maturity classification from trading are recorded at fair value. Unrealised gains or losses are charged to the consolidated statements of income on
the date of reclassification.
Marketable securities are stated net of allowance for possible losses and any unamortised premiums or discount. Premiums and discounts are amortised using the effective interest rate
method.
Marketable securities are derecognised from the consolidated balance sheet after the Bank has fully transferred all significant risk and rewards of the related marketable securities.