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 530 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
i. Marketable Securities continued
For marketable securities which are 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.
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.
j. Government Bonds
Government Bonds represent bonds issued by the Government of the Republic of Indonesia. Government Bonds consists of Government Bonds from the recapitalisation program and
Government Bonds purchased from the market.
Government Bonds are classified as financial assets at fair value through profit or loss, available for sale and held to maturity. Refer to Note 2b for the accounting policy of financial assets at fair value
through profit or loss, available for sale and held to maturity.
Prior to 1 January 2010, accounting policy for Government Bonds are similar with marketable securities as described in Note 2i.
k. Other Receivables - Trade Transactions
Other receivables - Trade Transactions represent receivables resulting from contracts for trade- related facilities given to customers, which will be reimbursed on maturity.
Other receivables - Trade Transactions are classified as financial assets in loans and receivables. Refer to Note 2b for the accounting policy of loans and receivables.
Prior to 1 January 2010, Other receivables - Trade Transactions are presented at their outstanding balances, net of allowance for impairment losses.
l. Securities PurchasedSold under ResaleRepurchase Agreements
Securities purchased under resale agreements are presented as assets in the consolidated balance sheet at the agreed resale price less unamortised interest income and allowance for impairment
losses. The difference between the purchase price and the agreed selling price is treated as deferred unamortised interest income and amortised as income over the period, commencing from
the acquisition date to the resale date using the effective interest rate method.
Securities purchased under resale agreements are classified as financial assets in loans and receivables. Refer to Note 2b for the accounting policy of loans and receivables.
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 531 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
l. Securities PurchasedSold under ResaleRepurchase Agreements continued
Prior to 1 January 2010, the difference between the purchase price and the resale price is treated as deferred unamortised interest income and amortised as income over the period, commencing
from the acquisition date to the resale date by using straight-line method.
Securities sold under repurchase agreements are presented as liabilities in the consolidated balance sheet at the agreed repurchase price net of the unamortised prepaid interest. The
difference between the selling price and the agreed repurchase price is treated as prepaid interest and recognised as interest expense over the period, commencing from the selling date to the
repurchase date using effective interest rate method.
Securities sold under repurchase agreements are classified as financial liabilities at amortised cost. Refer to Note 2b for the accounting policy for financial liabilties at amortised cost.
Prior to 1 January 2010, the difference between the selling price and the repurchase price is treated as prepaid interest and is recognised as an expense over the period, commencing from the selling
date to the repurchase date by using straight-line method.
m. Derivative Receivables and Derivative Payables
All derivative instruments including foreign currency transactions for funding and trading purposes are recognised in the consolidated balance sheet at their fair values. Fair value is determined based
on market value using Reuters rate at reporting date or discounted cash flow method.
Derivative receivables are presented at the amount of unrealised gain from derivative contracts, less allowance for impairment losses. Derivative payables are presented at the amount of
unrealised loss from derivative contracts.
Gains or losses from derivative contracts are presented in the consolidated financial statements based on its purpose designated upon acquisition, as 1 fair value hedge, 2 cash flow hedge, 3
net investment in a foreign operation hedge, and 4 trading instruments.
1. Gain or loss on a derivative contract designated and qualifying as a fair value hedging
instrument and the gain or loss arising from the changes in fair value of hedged assets and liabilities is recognised as gain or loss that can be set off one another during the same
accounting periodyear. Any difference representing hedge ineffectiveness is directly recognised as gain or loss in the consolidated statement of income in current year.
2. The effective portion arising from gain or loss of derivative contracts, which are both designated
and qualify as a cash flow hedge instruments is reported as other comprehensive income, a separate component under the equity section. The hedge ineffectiveness portion is recognised
as a gain or loss in the current year consolidated statement of income.
3. Gain or loss arising from derivative contract that is designated, qualifies as a net investment
hedge in a foreign operation and that is highly effective is reported as other comprehensive income, a separate component under the equity section.
4. Gain or loss arising from derivative contract not designated as a hedging instrument or
derivative contract that does not qualify as a hedging instrument is recognised in the current year consolidated statement of income.
