NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 535 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
q. Net Investment in Finance Lease
Net investment in finance lease represent lease receivable plus the residual value at the end of the lease period and stated net of unearned lease income, security deposits and the allowance for
impairment losses. The difference between the gross lease receivable and the present value of the lease receivable is recognized as unearned lease income. Unearned lease income is allocated to
current year consolidated statement of comprehensive income based on a constant rate of return on net investment using the effective interest rate.
The lessee has the option to purchase the leased asset at the end of the lease period at a price mutually agreed upon at the commencement of the agreement.
Early termination is treated as a cancellation of an existing contracts and the resulting gain or loss is credited or charged to the current year consolidated statement of comprehensive income.
Net investment in finance leases are classified as loans and receivables. Refer to Note 2c to the accounting policy for loans and receivables.
r. Fixed Assets and Leased Assets
i. Fixed assets and Software Fixed assets except for land is stated at cost less accumulated depreciation and impairment
losses. Such cost includes the cost of replacing part of the fixed assets when that cost is incurred, if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs that do not have future economics benefit
are recognised in the consolidated statement of income as incurred. Software is recognised as intangible assets.
Depreciation and amortisation is calculated using the straight-line method over the estimated useful lives of the assets as follows:
Years Buildings
20 Furniture, fixtures, office equipment and computer and vehicles
4-5 Software
5 Fixed assets are derecognised upon disposal or when no future economic benefits are expected
from their use or disposal. Any gain or loss arising from derecognition of the asset calculated as the difference between the net disposal proceeds and the carrying amount of the asset is
included in consolidated statement of income in the year the asset is derecognised.
The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each financial year end.
Construction in progress is stated at cost and is presented as part of fixed assets. Accumulated costs are reclassified to the appropriate fixed assets account when the assets are substantially
complete and are ready for their intended use.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 536 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
r. Fixed Assets and Leased Assets continued
i. Fixed assets and Software continued Prior to January 1, 2012, the land assets are recorded in accordance with SFAS 47, Accounting
for Land, all costs and expenses incurred in connection with the acquisition of land rights, among others, the cost, the cost of survey and measurement, notary fees and taxes associated with it, are
deferred and presented separately from the cost of land acquisition. Cost of acquiring land rights are deferred are presented as part of Other Assets in the consolidated statements of financial
position and is amortized over the useful life of the relevant land rights using the straight-line method.
In addition, SFAS 47 also states that the right to land is not amortized unless it meets certain conditions specifie.
Starting 1 January 2012, in accordance with IAS 16 Fixed Assets and ISAK 25 Land Rights. The cost of land rights in the form of right to cultivate, right to build and use rights are recognized
as fixed assets. The acquisition cost is the cost that are directly attributable to obtain land rights, including the cost of legal rights to the land when the land was first acquired.
Land rights in the form of right to cultivate, right to build and use rights are not depreciated, unless there is evidence to indicate that the extension or renewal of land is likely to or definitely not
obtained.
SFAS No. 48 Revised 2009, “Impairment of Assets” states that the carrying amounts of fixed assets are reviewed at each consolidated statement of financial position date to assess whether
they are recorded in excess of their recoverable amounts and, when carrying value exceeds this estimated recoverable amount, assets are written down to their recoverable amount.
Effective 1 January 2008, Bank Mandiri applied SFAS No. 16 Revised 2007 “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 The Group apply SFAS No. 30 Revised 2011 of the Lease, effective beginning on or after 1
January 2008. 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 fulfillment 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 rewards incidental 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 incidental to ownership of assets.
Based on SFAS No. 30 Revised 2011, under a finance leases, Bank and Subsidiaries recognise assets and liabilities in its consolidated statement of financial position at amounts equal to 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 charge 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 charges are reflected in the consolidated statement of income. Capitalised 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 the Bank will obtain ownership by the end of the lease term.
