Other Assets Mandiri - Investor Relations - Audited Financials

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011 Expressed in millions of Rupiah, unless otherwise stated Appendix 541 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

z. Insurance Contract continued

Liability to unit-linked policyholders continued Funds received from customers for non-sharia unit-linked products are reported as gross premiums in the consolidated statements of comprehensive income. Liabilities to unit-linked policyholders are recognised in the consolidated statement of financial position for the amount received net of the portion of premium representing the Subsidiary’s revenue, with corresponding income statement recognition for the increase in liabilities to unit-linked policyholders. Any interest, gain or loss due to increases or decreases in market value of investments are recorded as income or expense, with a corresponding recognition of increase in liability to unit-linked policyholders in the consolidated statements of comprehensive income and liability to unit-linked policyholders in the consolidated statement of financial position. Funds received from customers for unit-linked products is recognised as liabilities to unit-linked policyholders in the consolidated statement of financial position for the amount received net of the portion representing the Subsidiary’s fees in managing the unit-linked product revenue. aa. Marketable Securities Issued Marketable securities issued by the Bank and its Subsidiaries, include floating rate notes, medium term notes and travelers’ cheques, 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 marketable securities issued. Marketable securities issued are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost. ab. 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. Fund borrowings are initially measured at fair value minus directly attributable transaction costs. Fund borrowings are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost. ac. Subordinated Loans Subordinated loans are initially measured at fair value minus 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. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.