PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 43 - An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to
sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of
continuing operations are recognized in the consolidated statement of comprehensive income as “impairment losses”. In assessing the value in use, the estimated net future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs to sell, recent market transactions are taken into account, if available.
If no such transactions can be identified, an appropriate valuation model is used to determine the fair value of the assets. These calculations are corroborated by valuation
multiples or other available fair value indicators. Impairment losses of continuing operations, are recognized in the consolidated statement of
comprehensive income under expense categories that are consistent with the functions of the impaired assets.
An assessment is made at each annual reporting period as to whether there is any indication that previously recognized impairment losses recognized for an asset may not
longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset is reversed only if there has
been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, the carrying amount of the asset
is increased to its recoverable amount. The reversal is limited so that the carrying amount of the assets does not exceed its recoverable amount nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Reversal of an impairment loss is recognized in the consolidated
statement of comprehensive income. After such a reversal, the depreciation charge on the said asset is adjusted in future periods to allocate the asset’s revised carrying amount, less
any residual value, on a systematic basis over its remaining useful life.
v. Deposits and Deposits from Other Banks
Deposits and deposits from other banks are classified as financial liabilities measured at amortized cost using the effective interest method. Incremental costs directly attributable to
the acquisition of deposits and deposits from other banks deducted from the amount of deposits. Refer to Note 2i for the accounting policy for financial liabilities measured at
amortized cost. Deposits are liabilities to customers in the form of demand deposits, savings deposits and
time deposits. Demand deposits represent deposits of customers which may be used as instruments of
payment, and which may be withdrawn at any time by checks, or other orders of payment or transfers.
Savings deposits represent deposits of customers which may only be withdrawn when certain agreed conditions at the account opening are met. They may not be withdrawn by
checks or other equivalent instruments, except by using specific withdrawal slip which can only be validated at the depository bank andor by using Automatic Teller Machine ATM
card.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 44 - Time deposits represent deposits of customers which may only be withdrawn after a certain
period of time in accordance with the agreement with the customers at the time of placement, or the customers will be fined or penalized if withdrawals are made before
maturity. Deposits include syariah deposits and unrestricted investments consisting of:
•
Savings Wadiah is entrusted funds in the form of savings where income fund owners get a bonus.
•
Unrestricted investments in current accounts, savings and time deposits represent deposits of customers funds that provide benefits for the owner of funds from Islamic
unit revenue for the use of these funds in accordance with the ratio determined and approved previously.
Deposits from other banks are liabilities to other banks in the form of demand deposits, call money less than or 90 days and time deposits with original maturities of each agreement.
w. Insurance Contracts
Insurance contracts are those contracts wherein the insurers have accepted significant insurance risk from another party the policyholders by agreeing to compensate the
policyholders if a specified uncertain future event the incurred event adversely affects the policyholders.
Once a contract has been classified as an insurance contract, it remains an insurance contract over the remaining term, even if the insurance risk reduces significantly during this
period, unless all rights and obligations are extinguished. Reinsurance Assets
Reinsurance assets are the cedants net contractual rights under a reinsurance contract. The amount of reinsurance asset of the liability for future policy benefits, unearned
premiums and estimated claims liability are estimated in a manner consistent with the approach used in determining the liability for future policy benefits, unearned premiums and
claims liability estimates, based on the terms and the terms of the insurance contract. The Group’s management assesses at each consolidated statement of financial position
date whether reinsurance assets are impaired. Reinsurance asset impairment occurs if, and only if, there is an objective evidence that the cedant did not receive the entire amount in
accordance with the contract requirements and the impact can be measured reliably. Impairment loss is recognized in the consolidated of statement of comprehensive income.
Liabilities for future policy benefits Liabilities for future policy benefits represent the difference between the present value of
future policy benefits and the present value of the expected future premiums.
