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 524 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued v. Deposits from Customers
Deposits from customers are the funds placed by customers excluding banks with the Bank based on a fund deposit agreements. Included in this account are demand deposits, savings deposits,
time deposits and other similar.
Demand deposits represent deposits of customers that may be used as instruments of payment, and which may be withdrawn at any time by cheque, automated teller machine card ATM or other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. These are stated at nominal value.
Savings deposits represent deposits of customers that may only be withdrawn over the counter and via ATMs or funds transfers by SMS Banking, Phone Banking and Internet Banking when certain
agreed conditions are met, but which may not be withdrawn by cheque or other equivalent instruments. These are stated at nominal value.
Time deposits represent customers deposits that may only be withdrawn after a certain time based on the agreement between the depositor and the Bank.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 the nominal amount set
forth 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 Wadiah demand deposits can be used as payment instruments and can be withdrawn any time using cheque and bilyet giro.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 savind deposits earn bonus based on Bank’s policy. Wadiah saving and demand deposits are stated at the Bank’s liability amount.
w. Deposits from Other Banks
Deposits from other banks represent liabilities to local and overseas banks, in the form of demand deposits, savings deposits, inter-bank call money with original maturities of 90 days or less and time
deposits. Deposits from other banks are stated at the amount due to the other banks.
Included in the deposits from other banks are sharia deposits in form of wadiah deposits, unrestricted investment which comprise mudharabah savings and mudharabah time deposits, and
Certificates Mudharabah Investment Bank SIMA. SIMA is an investment certificate issued by the BSM which adopts profit sharing practice and only traded among banks. SIMA financing period
ranges from 1 – 6 months.
x. Marketable Securities Issued
Marketable securities issued by the Bank and its subsidiaries, include floating rate notes, medium- term notes and travelers’ cheques, are recorded at their nominal value. Under Bank Indonesia
requirements, deposits from other banks with periods of more than 90 days are also presented as marketable securities issued. Premiumdiscount from the issuance of floating rate notes and
medium term notes are recognised as deferred incomeexpense and amortised using the straight line method until the maturity date.
y. Fund Borrowings
Fund borrowings represent funds received from other banks, Bank Indonesia or other parties with the obligation of repayment in accordance with the requirements of the loan agreement.
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 525 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued z.
Subordinated Loans
Subordinated loans are presented at nominal value less unamortised discount. Costs incurred in connection with the issuance of subordinated loans is recognised as a discount and is deducted
directly from the proceeds of subordinated loans issuance and amortised on a straight-line method until the maturity date.
aa. Income Tax
The balance sheet liability method is applied to determine income tax expense. 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 balance sheets at each reporting date. This method also requires the recognition of future tax
benefits, such as the tax losses carry-forward, 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.
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. Deferred tax assets are presented net of deferred tax liabilities in the consolidated balance sheets.
ab. Interest Income and Expense
Interest income and expense are recognised on an accrual basis. Interest income of earning assets that are classified as non-performing is recognised only to the extent that interest is received in
cash. When a loan is classified as non-performing, any interest income previously recognised but not yet collected is reversed against interest income. The reversed interest income is recognised as
a contingent receivable.
Cash receipts from loans that are classified as doubtful or loss are applied to the loss principal first. The excess of cash receipts over the outstanding loan principal balance is recognised as interest
income in the consolidated statements of income.
Interest income from restructured loan is recognised only to the extent that interest is received in cash, before the loan’s quality become current as determined by Bank Indonesia Regulation
No. 72PBI2005 dated 20 January 2005 regarding Asset Quality Rating for Commercial Banks, as amended by PBI No. 112PBI2009 dated 29 January 2009.
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 526 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued ab. Interest Income and Expense continued
Interest receivable on non-performing assets of Bank Mandiri and its Subsidiaries is recorded as contingent receivables in the commitment and contingency statement in the notes to the
consolidated financial statements.
Included in interest income and expense are sharia income and expense. The Bank’s income as a fund manager mudharib consist of income from sale and purchase on murabahah transaction,
income from istishna, rent income ijarah and income from profit sharing from mudharabah and musyarakah financing as well as other main operating income.
Income from murabahah, which payment is made on installment or deferred, is recognised proportionally over the contract period, in accordance with generally accepted banking practice
Surat Bank Indonesia No.101260DPbS dated 15 October 2008 and Surat Bank Indonesia No.9634DPbS dated 20 April 2007.
Considering the risk on murabahah receivables, the Subsidiary adopts the following policy in recognising income from murabahah financing:
1. Murabahah with a deferred payment term of one year or less, without considering the cash
collection on receivables nor management fee collection risks, the income is recognised using effective interest method annuity over the contract period.
2. Murabahah with a deffered payment term above than one year, where the risk of cash
collection receivables andor management fee are relatively low risk, the income is recognised using effective interest method annuity.
Subsidiary determine level of the risk based on internal requirement. Istishna income is recognised using percentage of completion method or at the end of contract.
Ijarah income is recognised proportionally over the contract period. Musyarakah income for active partner is recognised based on an agreed portion in accordance with
the financing contract. Mudharabah income is recognised in a period where the right of revenue sharing is due based on
agreed portion. It is not allowable to recognise the income based on projection. Subsidiaries’ consumer financing income is presented net of with consumer financing income for
other banks in relation with channeling transactions, joint financing cooperations, factoring, and the appointment as manager of accounts receivable.
ac. Fees and Commissions Income
Fees and commissions that are directly related to lending activities andor involving specific time periods are deferred and amortised using the straight-line method over those periods. The
unamortised fees and commissions balances relating to loans which were settled prior to maturity are recognised upon settlement of the loan. Other fees and commissions that are not directly
related to lending activities or involving specific time periods are recognised as income at the transaction date.
