PT BANK MANDIRI PERSERO AND SUBSIDIARIES
Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001
Expressed in millions of Rupiah, unless otherwise stated
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144
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62. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES
FOLLOWED BY THE BANK “INDONESIAN GAAP” AND INTERNATIONAL ACCOUNTING STANDARDS “IAS” Continued
e. Provisions Under Indonesian GAAP, the Bank recognized provisions for merger as of January 1, 2000.
Upon adoption of SFAS No. 57 – “Provisions, Contingent Liabilities and Contingent Assets”, effective January 1, 2001, certain of the provisions for merger did not meet this standard’s
recognition criteria and were derecognised accordingly.
Under IAS, the Bank did not recognize certain of the provisions for merger as of January 1, 2000 in accordance with the provisions of IAS No. 37-“Estimated Liabilities, Contingent
Liabilities and Contingent Assets” that have been reflected as an adjustment to accumulated losses as of that date.
f. Allowance for Possible Losses on Commitments and Contingencies Under Indonesian GAAP, the Bank records allowances for possible losses on commitments and
contingencies using a general and specific allowance based on management’s estimates and using the guidelines prescribed by Bank Indonesia.
Under IAS, the Bank did not recognize certain of the allowance for possible losses on commitments and contingencies in accordance with the provisions of IAS No. 37-“Estimated
Liabilities, Contingent Liabilities and Contingent Assets” from January 1, 2000.
g. Deferred Income Taxes The impact on deferred income taxes of the IAS adjustments has been recognized in
accordance with IAS 12 – “Income Taxes”. An effective tax rate of 30 has been applied.
63. COMPARABILITY OF IAS AS OF DECEMBER 31, 2002 AND 2001 AND FOR THE YEARS THEN ENDED
In 1998, the Standing Interpretations Committee issued SIC-8 “First-time Application of IAS as the Primary Accounting Basis” that allows application of IAS based on transitional provisions of each
standard. The Bank has followed this guidance in the preparation of its reconciliation of net income and shareholders’ equity to the amounts determined under IAS Note 64. This may result in
comparability differences between years for accounting standards that are not electively applied retroactively or do not permit retroactive application.
In December 1998, the International Accounting Standards Setting Committee issued IAS No. 39 – “Financial Instruments: Recognition and Measurement” that, for the Bank, is effective on a
prospective basis only. The adoption of IAS No. 39 has a material impact on certain financial assets and liabilities. The transition adjustment comprised of adjustments to investments held to maturity,
allowances for possible losses on earning assets and derivative instruments, and the related corporate income tax, that is reflected as an adjustment to accumulated losses as of January 1,
2001.
PT BANK MANDIRI PERSERO AND SUBSIDIARIES
Notes to the Consolidated Financial Statements Continued December 31, 2002 and 2001
Expressed in millions of Rupiah, unless otherwise stated
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145
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64. RECONCILATION OF NET INCOME AND SHAREHOLDER’S EQUITY TO THE AMOUNTS DETERMINED UNDER IAS
The following is a summary of the adjustments to shareholder’s equity as of December 31, 2002 and 2001 and net profit for the years then ended, which would be required if IAS had been applied
by Bank Mandiri instead of Indonesian GAAP in the preparation of its consolidated financial statements.
2002 2001
Net profit as reported in the consolidated financial statements prepared under Indonesian GAAP
3,585,589 2,745,757
IAS adjustments – increase decrease due to: Allowance for possible losses on earning assets
215,445 955,627
Allowance for possible losses on commitments and
contingencies 77,277
351,232 Employee benefits
94,096 10,437
Change in fair value of derivatives 52,333
- Securities and government bonds reclassified to trading
- 293,303
De-recognition of provisions -
995,393 Deferred income taxes
2,478 184,562
Net decrease increase in reported net profit 5,783
430,644 Net profit in accordance with IAS
3,579,806 3,176,401
Net earnings per share 0.842
0.747
2002 2001
Shareholder’s equity as reported in the consolidated financial statements prepared
under Indonesian
GAAP 14,434,510
10,776,785 IAS adjustments – increase decrease due to:
Allowance for possible losses on earning assets 2,480,984
2,265,539 Allowance for possible losses on commitments
and contingencies
387,174 464,451
Employee benefits 3,955
90,141 Change in fair value of derivatives
52,333 -
Deferred income taxes 843,561
846,039 Net increase in reported shareholder’s equity
1,968,309 1,974,092
Shareholder’s equity in accordance with IAS 16,402,819
12,750,877
