PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued v. Interest Income and Interest Expense continued
Interest receivable on non-performing assets of Bank Mandiri and its Subsidiaries is treated as off- balance sheet and is disclosed in the notes to the consolidated financial statements.
Interest income and expense include syariah income and expense. Syariah income is earned from transactions of murabahah, istishna and ijarah and from mudharabah and musyarakah financing profit
sharing income. Income from murabahah and ijarah is recognized using the accrual basis while income from istishna transactions and mudharabah and musyarakah financing profit sharing is recognized
when cash is received as a payment of an installment. Syariah expense consists of expenses from mudharabah profit sharing and wadiah bonuses.
w. Fees and Commissions
Significant fees and commissions that are directly related to lending activities andor involving specific time periods are deferred and amortized using the straight-line method over those periods. The
balances of unamortized fees and commissions relating to loans settled prior to maturity are recognized upon settlement. Other fees and commissions that are not directly related to lending
activities or involving specific time periods are recognized as income at the transaction date.
x. Post-Employment Benefits
The estimated provision is based on the results of an independent actuarial valuation in accordance with Labor Law No. 132003 and the revised PSAK No. 24 regarding “Employee Benefits”.
Bank Mandiri established a defined contribution pension plan covering substantially all of its eligible employees from August 1, 1999. It also supports defined benefit pension plans, which were derived
from each of the Merged Banks’ pension plans.
Bank Mandiri recognizes a provision for post employment benefits under the Labor Law No. 132003 regarding the settlement of labor dismissal and the stipulation of severance pay, gratuity and
compensation in companies. The provision has been calculated by comparing the benefit that will be received by an employee at
normal pension age from the Pension Plans with the benefit as stipulated under the Labor Law No. 132003 after deducting accumulated employee contributions and the results of its investments. If
the pension benefit from the Pension Plans is less than the benefit as required by the Labor Law, the Bank will have to pay such shortage. Provision for employee service entitlements is accrued based on
the results of an independent actuary’s valuation. Actuarial gain and loss is recognized as income or expense if the net cumulative unrecognized actuarial gains or losses at the end of the previous
reporting period exceeded the greater of 10 of the present value of the defined benefit obligation at that date before deducting plan assets and 10 of the fair value of any plan assets at that date. The
amount of actuarial gain or loss is recognized through the average remaining working period of the employee in the program. Past service cost arises when the bank introduces a defined benefit plan or
changes the benefits payable under an existing defined benefit plan. Past service cost is recognized over the period until the benefits concerned are vested.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2008 and 2007 Expressed in millions of Rupiah, unless otherwise stated
33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
