Deposits and Deposits from Other Banks

PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 46 - ac. Accounting for Insurance under Sharia Principles In the insurance accounting system of branch using Sharia principles, a subsidiary separates the funds belonging to the stockholders from those to “Takaful” participants. The reporting of the “takaful” participants’ fund reflects the financial position, result of operations and the participants’ surplus or deficit. The allocation of profit sharing mudharabah on the underwriting surplus and investment income is distributed to participants who never make any claims during the insurance period. ad. Employee Benefits Short-term employee benefits Short-term employee benefits are in the form of wages, salaries and social security Jamsostek contribution and bonuses. Short-term employee benefits are recognized at its undiscounted amount as a liability, after deducting any amount already paid, in the consolidated statement of financial position, and as an expense in the consolidated statements of comprehensive income. Post-employment benefits Post-employment benefits are an unfunded defined-benefit plans which amounts are determined based on years of service and salaries of the employees at the time of pension. The actuarial valuation method used to determine the present value of defined-benefit reserve, related current service costs and past service costs is the Projected Unit Credit. Current service costs, interest costs, vested past service costs and effects of curtailments and settlements if any are charged directly to current operations. Past service costs which are not yet vested and actuarial gains or losses for working active employees are amortized during the employees’ average remaining years of service, until the benefits become vested. ae. Income Tax Current tax expense is determined based on the taxable income for the year computed using prevailing tax rates. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that taxable income will be available in future periods against which the deductible temporary differences can be utilized. Deferred tax is calculated at the tax rates that have been enacted or substantively enacted at statement of financial position date. Deferred tax is charged to or credited in the consolidated statements of income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also charged to or credited directly in equity. Deferred tax assets and liabilities are offset in the consolidated statement of financial positions, except if these are for different legal entities, in the same manner the current tax assets and liabilities are presented. Amendments to tax obligations are recorded when an assessment is received or, if appealed against by the Group, when the result of the appeal is determined. PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 47 - af. Earnings Per Share Earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the year. Diluted earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the year as adjusted for the effects of all potentially dilutive ordinary shares. ag. Segment Information Segment information is prepared using the accounting policies adopted for preparing and presenting the consolidated financial statements. Effective January 1, 2011, PSAK No. 5 Revised 2009 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performances. In contrast, the predecessor standard required the Group to identify two sets of segments business and geographical, using a risks and returns approach. An operating segment is a component of an entity: a. That engages in business activities which it may earn revenue and incur expenses including revenue and expenses relating to the transcation with other components of the same entity; b. Whose operating results are reviewed regularly by the entity’s chief operating decision maker to make decision about resources to be allocated to the segments and assess its performance; and c. For which discrete financial information is available. Information reported to the chief operating decision maker for the purpose of resources allocation and assessment of its performance is more specifically focused on the category of each product, which is similar to the business segment information reported in the prior period. ah. Provisions Provisions are recognized when the Group has present obligation legal or constructive as a result of a past event, it is proable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.