These consolidated financial statements are originally issued in Bahasa.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
55
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
r. Fixed assets and leased assets continued
i. Fixed assets and software continued
Bank Mandiri and Subsidiaries applied SFAS No. 16 Revised 2011 “Fixed Assets”. Bank Mandiri and Subsidiaries chose the cost model, and therefore, the balance of fixed assets
revaluation reserve at the first time adoption of SFAS No. 16 Revised 2007, which were presented in the shareholders’ equity section amounting to Rp3,046,936 in the consolidated
statement of financial position, were reclassified to appropriated retained earnings in 2008.
ii.Leased assets
Group apply SFAS No. 30 Revised 2011 “Lease”, effective beginning on or after January 1, 2012. Under SFAS No. 30 Revised 2011, determination of whether an agreement is a lease
agreement or lease agreement containing the substance of the agreement based on the inception date and whether the fulfilment of the agreement depends on the use of an asset and
the agreement provides a right to use the asset. According to this revised SFAS, leases that transfer substantially all the risks and benefit related to ownership, are classified as finance
leases. Further, a lease is classified as operating leases, if the lease does not transfer substantially all the risks and benefits related to ownership of assets.
Based on SFAS No. 30 Revised 2011, under a finance leases, Group recognise assets and liabilities in its consolidated statement of financial position as
the fair value of the leased property or, if lower, the present value of the minimum lease payments, each determined at the
inception of the lease. Lease payment is apportioned between the finance charge and the reduction of the outstanding liability. The finance expense is allocated to each period during the
lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Finance expenses recorded in the consolidated statement of income. Leased assets
presented under fixed assets are depreciated over the shorter of the estimated useful life of the assets and the lease term, if there is no reasonable certainty that Bank Mandiri will obtain
ownership by the end of the lease term.
Under an operating lease, the Group recognise lease payments as an expense on a straight-line basis over the lease term.
If a rental agreement contains elements of land and buildings, the Group assessed the classification of each element as a finance lease or an operating lease separately.
iii.Intangible assets
Intangible assets are recognized if, and if only when its cost can be measured reliably and it is probable that expected future benefits that are attributable to it will flow to the Bank and
Subsidiaries. Intangible assets consist of goodwill and computer software that are purchased by the Bank and Subsidiaries.
Software purchased by the Bank and subsidiaries is recorded at cost less accumulated amortization and accumulation of possible losses. Amortization method, estimated useful life
and residual value is reviewed at end of reporting period and adjusted if necessary.
Refer to Note 2s for the accounting treatment of goodwill.
These consolidated financial statements are originally issued in Bahasa.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
56
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
s. Investments in shares
Investments in shares represent long-term investments in non-publicly-listed companies and temporary investments in debtor companies arising from conversion of loans to equity.
Investments in shares in associated company represent ownership interests of 20.00 to 50.00 are recorded using the equity method. Under this method, investments are recorded at cost and
adjusted for the Bank’s proportionate share in the net equity of the investees and reduced by dividends earned starting the acquisition date net of by allowance for impairment losses.
Temporary investment is written-off from the consolidated statement of financial position if it is held for more than 5 years in accordance with Bank Indonesia Regulation No. 72PBI2005 dated
January 20, 2005 on “Asset Quality Ratings for Commercial Banks”, as amended by Bank Indonesia Regulation No. 112PBI2009 dated January 29, 2009. Since October 24, 2012, Group
follows Bank Indonesia Regulation No. 1415PBI2012 dated October 24, 2012 regarding “Asset Quality Rating for Commercial Banks” and Circular Letter of Bank Indonesia No.1528DPNP dated
July 31, 2013 regarding Asset Quality Ratings for Commercial Banks.
Investment in shares with ownership below 20 are classified as financial assets available for sale. Refer to Note 2c for the accounting policy of financial assets available for sale.
Goodwill is recognised, when there is a difference between the acquisition cost and the Bank’s portion of the fair value of identified assets and liabilities at the acquisition date. Goodwill is
presented as other assets. The Bank conducts an assessment of goodwill impairment regularly.
t. Allowance for possible losses on non-earning assets
Non-earning assets of Bank Mandiri and the Subsidiaries consist of repossessed assets, abandoned properties, inter-office accounts and suspense accounts.
The Bank provided an allowance for impairment of collateral confiscated and abandoned property equivalent to different between carrying amount and fair value net of costs to sell. As for the inter-
office account and suspense account, equivalent to different between carrying value and the recovery value.
u. Acceptance receivables and payables
Acceptance receivables are classified as financial assets in loans and receivables category. Refer to Note 2c for the accounting policy of loans and receivables.
Acceptance payables are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
v. Other assets
Other assets include accrued income for interest, provision and commissions, receivables, repossessed assets, abandoned properties, inter-office accounts and others.
Repossessed assets represent assets acquired by Bank Mandiri and Subsidiaries, both from auction and non auction based on voluntary transfer by the debtor or based on debtor’s approval
to sell the collateral where the debtor could not fulfil their obligations to Bank Mandiri and Subsidiaries. Repossessed assets represent loan collateral that were taken over as part of loans
settlement and presented in “Other Assets”.
