PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
52
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h. Current accounts with Bank Indonesia and other banks continued
The minimum statutory reserve continued Based on Bank Indonesia Regulation No. 1019PBI2008 dated October 14, 2008 regarding
Statutory Reserves of Commercial Banks in the Bank Indonesia in Rupiah and Foreign Currency, as amended by Bank Indonesia Regulation No. 1025PBI2008 dated October 23, 2008 as amended
by Bank Indonesia Regulation No. 1219PBI2010 dated October 4, 2010 as amended by Bank Indonesia Regulation No. 1310PBI2011 dated February 9, 2011 which has been amended with
PBI No. 1515PBI2013 dated December 24, 2013 and updated by Bank Indonesia Regulation No.1721PBI2015 dated November 26, 2015, PBI No. 183PBI2016 dated March 10, 2016 and
PBI No. 1814PBI2016 dated August 18, 2016, the Bank should comply with a Minimum Statutory Reserve GWM in Bank Indonesia in Rupiah and foreign currencies. Minimum reserve requirement
in Rupiah consists of Primary GWM, Secondary GWM and Loan to Funding Ratio LFR GWM. Primary GWM in Rupiah is set at 6.50 2015: 7.50 from the Rupiah third party funds, secondary
GWM in Rupiah is set at minimum 4.00 from the Rupiah third party funds and GWM LFR in Rupiah is calculated by the difference between lower disincentive parameter or higher disincentive
parameter with the difference between Bank’s LFR and target LFR by taking into account the difference between Bank’s Capital Adequacy Ratio CAR and incentive CAR. Primary GWM and
secondary GWM are applied effectively starting November 1, 2010 and GWM LDR is applied effectively starting 1 March 2011. GWM LFR applied effectively on August 3, 2015 to replace GWM
LDR. GWM in foreign currency is set at 8.00 of foreign currency third party fund.
The subsidiary company that engaged in business operation using Sharia principle, had implemented the Minimum Statutory Reserve in accordance with Bank Indonesia Regulation
No. 621PBI2004 dated August 3, 2004 regarding the Minimum Statutory Reserve in Rupiah and foreign currencies for Commercial Bank that engaged in business operation based on Sharia
principle, which amended by Bank Indonesia Regulation No. 823PBI2006 dated October 5, 2006 and the latest amendment using Bank Indonesia Regulation No. 1023PBI2008 dated October 16,
2008 and subsequently replace by PBI No.1516PBI2013 dated December 24, 2013, where every bank is obliged to maintain the Minimum Statutory Reserve in Rupiah and foreign currencies at
5.00 and 1 from third party fund in Rupiah and foreign currencies.
i. Placements with Bank Indonesia and other banks
Placements with Bank Indonesia and other banks represent placements in the form of Bank Indonesia deposit facility FASBI, sharia FASBI FASBIS, call money, “fixed-term” placements,
time deposits and others. Placements with Bank Indonesia and other banks are stated at amortised cost using effective
interest rate less any allowance for impairment losses. Placement with Bank Indonesia and other banks are classified as loans and receivables. Refer to
Note 2c for the accounting policy of loans and receivables.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
53
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
j.
Marketable securities
Marketable securities consist of securities traded in the money market such as Certificates of Bank Indonesia SBI, Sharia Certificates of Bank Indonesia SBIS, Surat Perbendaharaan Negara
SPN, Negotiable Cerfiticates of Deposits, Medium Term Notes, Treasury Bills issued by government of other country and Government of Republic of Indonesia, export bills, securities
traded on the capital market such as mutual fund units and securities traded on the stock exchanges such as shares of stocks and bonds including Sharia Corporate bonds.
Marketable securities are classified as financial assets at fair value through profit or loss, available for sale, held to maturity, loan and receivables and at cost. Refer to Note 2c for the accounting
policy of financial assets at fair value through profit or loss, available for sale, held to maturity, loan and receivables and at cost.
Investments in mutual funds units are stated at market value, in accordance with the net value of assets of the mutual funds as at the date of the consolidated statement of financial position.
For marketable securities which are traded in organised financial markets, fair value is generally determined by reference to quoted market prices by the stock exchanges at the close of business on
the consolidated statement of financial position date. For marketable securities with no quoted market price, a reasonable estimate of the fair value is determined by reference to the current
market value of another instrument which substantially have the same characteristic or calculated based on the expected cash flows of the underlying net asset base of the marketable securities. Any
permanent impairment in the fair value of marketable securities classified as held to maturity and available for sale is charged to current year’s consolidated statement of profit or loss and other
comprehensive income.
Reclassification of marketable securities to held to maturity classification from available for sale are recorded at fair value. Unrealised gains or losses are recorded in the equity section and will be
amortised up to the remaining live of the marketable securities using the effective interest rate method to consolidated statement of profit or loss and other comprehensive income.
In 2015, a Subsidiary, AXA Mandiri Financial Services AMFS has reclassified the marketable securities bonds directly held by the subsidiary related to insurance technical reserves
shareholders fund reserves in the financial statements. The subsidiary has changed the classification of the aforementioned marketable securities from financial assets at fair value through
profit or loss to available-for-sale financial assets. This change is deemed as change in accounting policy therefore applied retrospectively. Since the impact of this change to the prior year’s financial
statements as a whole is immaterial, therefore the impact of the change is directly charged in 2015 financial statements. No restatement of the prior year’s financial statements is considered
necessary.
k. Government bonds Government bonds represent bonds issued by the Government of the Republic of Indonesia.
Government bonds consists of Government Bonds from the recapitalisation program and government bonds purchased from the market.
Government bonds are classified as financial assets at fair value through profit or loss, available for sale, held to maturity and at cost. Refer to Note 2c for the accounting policy of financial assets at fair
value through profit or loss, available for sale, held to maturity and at cost.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
54
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued l.
Other receivables - trade transactions
Other receivables - trade transactions represent receivables resulting from contracts for trade- related facilities given to customers, which will be reimbursed on maturity.
Other receivables - trade transactions are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
m. Securities purchasedsold under resalerepurchase agreements
Securities purchased under resale agreements are presented as assets in the consolidated statement of financial position at the agreed resale price less unamortised interest income and
allowance for impairment losses. The difference between the purchase price and the agreed selling price is treated as deferred unamortised interest income and amortised as income over the period,
commencing from the acquisition date to the resale date using the effective interest rate method.
Securities purchased under resale agreements are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of financial assets for loans and receivables.
Securities sold under repurchase agreements are presented as liabilities in the consolidated statement of financial position at the agreed repurchase price net of the unamortised prepaid
interest. The difference between the selling price and the agreed repurchase price is treated as prepaid interest and recognised as interest expense over the period, commencing from the selling
date to the repurchase date using effective interest rate method.
Securities sold under repurchase agreements are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilities at amortised cost.
n. Derivative receivables and derivative payables
All derivative instruments including foreign currency transactions for funding and trading purposes are recognised in the consolidated statement of financial position at their fair values. Fair value is
determined based on market value using Reuters rate at reporting date or discounted cash flow method.
Derivative receivables are presented at the amount of unrealised gain from derivative contracts, less allowance for impairment losses. Derivative payables are presented at the amount of unrealised
loss from derivative contracts.
Gains or losses from derivative contracts are presented in the consolidated financial statements based on its purpose designated upon acquisition, as 1 fair value hedge, 2 cash flow hedge, 3
net investment in a foreign operation hedge, and 4 trading instruments as follows:
1. Gain or loss on a derivative contract designated and qualifies as a fair value hedging instrument and the gain or loss arising from the changes in fair value of hedged assets and liabilities is
recognised as gain or loss that can be set off one another during the same accounting periodyear. Any difference representing hedge ineffectiveness is directly recognised as gain or
loss in current year.
2. The effective portion arising from gain or loss of derivative contracts, designated as a cash flow hedge instruments is reported as other comprehensive income. The hedge ineffective portion is
recognised as a gain or loss in the current year.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
55
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued n. Derivative receivables and derivative payables continued
3. Gain or loss arising from derivative contract that is designated as a net investment hedge in a foreign operation is reported as other comprehensive income, as long as the transactions are
effectively recognised as hedge transactions. 4. Gain or loss arising from derivative contract that is not designated as a hedging instrument or
derivative contract that does not qualify as a hedging instrument is recognised as gain or loss in current year.
Derivative receivables are classified as financial assets at fair value through profit or loss, meanwhile derivative payables are classified as financial liabilities at fair value through profit or loss.
Refer to Note 2c for the accounting policy of financial assets and liabilities at fair value through profit or loss.
o. Loans and sharia receivablesfinancing
Loans represent agreement to provide cash or cash equivalent based on agreements with borrowers, where borrowers are required to repay their debts with interest after a specified period,
and matured trade finance facilities which have not been settled within 15 days. Syndicated loans, direct financing and joint financing, and channeling loans are stated at their
outstanding balances in proportion to the risks borne by the Bank and its Subsidiaries. Included in loans are financing by Bank Syariah Mandiri “BSM”, a Subsidiary, in the form of sharia
receivables, sharia financing and funds of Qardh.
Brief explanation for each type of sharia financing is as follows: Mudharabah financing is a co-operation for certain project between first party malik, shahibul mal or
Subsidiary as owner of fund and second party amil, mudharib or debtors as fund manager whereas the profit sharing will be shared in accordance with percentage as stated in the agreement,
meanwhile losses will be borne by the Subsidiary except if the second party does negligence, error or violate the agreement. Mudharabah financing is stated at the outstanding financing balance less
allowance for possible losses. Musyarakah financing is a co-operation between two or more parties in a certain business wherein
each party provides a portion of fund on condition that the profit shall be shared based on the agreement, whereas losses shall be borne in accordance with the portion of the fund of each party.
Permanent musyarakah is musyarakah in which the fund portion of each partner is stated explicitly in the contract and remains the same until the contract expires. Declining musyarakah musyarakah
mutanaqisha is musyarakah in which the fund portion of the Bank will be transferred in several stages to the other partner, resulting in the declining of fund portion of the Bank and, at the end of
contract, the other partner will become the sole owner of the business. Musyarakah financing is stated at the outstanding financing balance less allowance for possible losses.
Ijarah receivables are the financing on the availability of fund in relation to transferring the right to use and benefit of a good and service based on rental transaction which was not followed by
transfer of the goods ownership to the lessee. Ijarah muntahiyah bittamlik is an agreement on the availability of fund in relation to transferring the use right and benefit of a good or service based on
rental transaction with an option to transfer the ownership of goods to the lessee. Ijarah receivables are recognised at due date at the amount of it lease income not yet received and presented at its
net realisable value, which is the outstanding balance of the receivables.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
56
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued o. Loans and sharia receivablesfinancing continued
