PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued e. Cash and Cash Equivalents
Cash and cash equivalents consist of cash, current accounts with Bank Indonesia and current accounts with other banks.
f. Placements with Bank Indonesia and Other Banks
Placements with Bank Indonesia and other banks represent placements in the form of BI deposit facility FASBI, call money, “fixed-term” placements, time deposits and others.
Placements with Bank Indonesia are stated at the outstanding balances, net of the unamortized interest. Placements with other banks are stated at the outstanding balances, net of allowance for
possible losses.
g. Securities
Securities consist of securities traded in the money market such as, Certificates of Bank Indonesia SBI, Wadiah Certificates of Bank Indonesia SWBI, Surat Perbendaharaan Negara SPN,
Negotiable Cerfiticates of Deposits, medium-term notes, floating rate notes, promissory notes, Treasury Bills issued by other country government and Republic of Indonesia’s government,
mandatory convertible bond, export bills, securities traded on the capital market such as mutual fund units and securities traded on the stock exchanges such as shares of stocks and bonds include
Syariah Mudharabah bonds. Investments in mutual fund units are stated at market value, which is the net value of assets of the
mutual funds at the balance sheet date. Any unrealized gains or losses at the balance sheet date are reflected in the current year’s consolidated profit or loss.
The value of securities is stated based on the classification of the securities, as follows: 1 Trading securities are stated at fair value. The unrealized gainslosses resulting from the
increasedecrease in fair value are recognized in the current year’s consolidated profit and loss. Upon the sale of securities in a trading portfolio, the difference between selling price and fair value
per books is recognized as a realized gain or loss on sale. 2 Available for sale securities are stated at fair value. Unrealized gainslosses resulting from the
increasedecrease in fair value are not recognized in the current year’s consolidated profit and loss but are presented as a separate component of shareholders’ equity. Gainslosses are
recognized in income and loss upon realization. 3 Held to maturity securities are stated at cost adjusted for unamortized discounts or premiums.
For securities which are actively traded in organized financial markets, fair value is generally determined by reference to quoted market bid prices by the stock exchanges at the close of business
on the balance sheet date, adjusted for transaction costs necessary to realize the assets. For securities where there is no quoted market price, a reasonable estimate of the fair value is determined
by reference to the current market value of another instrument which is substantially the same or is calculated based on the expected cash flows of the underlying net asset base of securities. Any
permanent decline in the fair value of securities held to maturity and available for sale is charged to current year’s consolidated profit or loss.
Purchase and sale of securities transactions both for the customer and for the Bank are recognized in the consolidated financial statements when there is an agreement on securities transactions.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
22
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued g. Securities continued
Securities are stated net of allowance for possible losses and unamortized premiums or discount. Premiums and discounts are amortized using the straight-line method.
Securities are derecognized from the consolidated balance sheet after the Bank has transferred all significant risk and rewards of the related securities.
h. Government Bonds
Government Bonds represent bonds issued by the Government of the Republic of Indonesia. Government Bonds are stated based on the classification of the bonds, which accounting treatment is
similar to those of securities as described in Note 2g above. For Government Bonds, which are traded in organized financial markets, fair value is generally
determined by reference to quoted market bid prices by Bloomberg’s and quoted price by broker on the balance sheet date. For Government Bonds where there are no quoted market prices, a
reasonable estimate of the fair value is calculated using the yield-to-maturity approach. Government Bonds was derecognized from the consolidated balance sheet after the Bank has
transferred all significant risk and rewards of the related Government Bonds.
i. Other Receivables - Trade Transactions
Other receivables - trade transactions represent receivables resulting from contracts for trade-related facilities given to customers, which are collectible when due, presented at their outstanding balances,
net of allowance for possible losses.
j. Securities PurchasedSold under ResellRepurchase Agreements
Securities purchased under resell agreements are presented as assets in the consolidated balance sheet at their resale price less unamortized interest and allowance for possible losses. The difference
between the purchase price and the selling price is treated as unrealized unamortized interest income and is recognized as income during the period from the purchase of securities to the date of
resell. Securities sold under repurchase agreements are presented as liabilities in the consolidated balance
sheet at the repurchase price less unamortized interest. The difference between the selling price and the repurchase price is treated as a prepaid expense and is recognized as expense during the period
from the sale of securities to the date of repurchase.
