PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
v. Deposits and Deposits from Other Banks
Deposits and deposits from other banks are classified as financial liabilities measured at amortized cost using the effective interest method. Incremental costs directly attributable to
the acquisition of deposits and deposits from other banks are deducted from the amount of deposits. Refer to Note 2h for the accounting policy for financial liabilities measured at
amortized cost. Deposits are liabilities to customers in the form of demand deposits, savings deposits and
time deposits. Demand deposits represent deposits of customers which may be used as instruments of
payment, and which may be withdrawn at any time by checks, or other orders of payment or transfers.
Savings deposits represent deposits of customers which may only be withdrawn when certain agreed conditions at the account opening are met. They may not be withdrawn by
checks or other equivalent instruments, except by using specific withdrawal slip which can only be validated at the depository bank andor by using Automatic Teller Machine ATM
card.
Time deposits represent deposits of customers which may only be withdrawn after a certain period of time in accordance with the agreement with the customers at the time of
placement, or the customers will be fined or penalized if withdrawals are made before maturity.
Deposits include syariah deposits and unrestricted investments consisting of:
•
Savings Wadiah is entrusted funds in the form of savings where income fund owners get a bonus.
•
Unrestricted investments in current accounts, savings and time deposits represent deposits of customers funds that provide benefits for the owner of funds from Islamic
unit revenue for the use of these funds in accordance with the ratio determined and approved previously.
Deposits from other banks are liabilities to other banks in the form of demand deposits, call money less than or 90 days and time deposits with original maturities of each agreement.
w. Insurance Contracts
Insurance contracts are those contracts wherein the insurers have accepted significant insurance risk from another party the policyholders by agreeing to compensate the
policyholders if a specified uncertain future event the incurred event adversely affects the policyholders.
A contract remains valid, even if the insurance risk is reduced significantly during this period, unless all rights and obligations are extinguished.
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PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
Reinsurance Assets Reinsurance assets are the cedants net contractual rights under a reinsurance contract.
The amount of reinsurance asset of the liability for future policy benefits, unearned premiums and estimated claims liability are estimated in a manner consistent with the
approach used in determining the liability for future policy benefits, unearned premiums and claims liability estimates, based on the terms and the terms of the insurance contract.
The Group’s management assesses at each consolidated statement of financial position date whether reinsurance assets are impaired. Reinsurance asset impairment occurs if, and
only if, there is an objective evidence that the cedant did not receive the entire amount in accordance with the contract requirements and the impact can be measured reliably.
Impairment loss is recognized in the consolidated of statement of comprehensive income.
Liabilities for Future Policy Benefits Liabilities for future policy benefits represent the difference between the present value of
future policy benefits and the present value of the expected future premiums. The liabilities for future policy benefits are estimated by the Company’s registered actuary
based on outstanding policies in-force, including policies with unpaid premiums within the policy grace period, in accordance with actuarial principles generally accepted in Indonesia.
Policy acquisition costs are not deferred and are charged to expense as incurred. Changes in liabilities for insurance policy benefits are recognized as underwriting expenses in the
consolidated statement of comprehensive income for the current year. Unearned Premiums and Estimated Claims Liability
Unearned premiums are calculated using the daily method by individual policy.
Estimated claims liability represents amounts set aside to provide for the outstanding and incurred claims arising from insurance policies in force during the accounting period. The
liability includes both reported and unreported claims.
Insurance Contract Liabilities Insurance contract liabilities consist of premiums received in advance, estimated claim
liabilities, unearned premium and liability for future policy benefits. On reporting date, the Group assesses insurance contract liabilities whether the recognized insurance liabilities are
adequate using current estimates of future cash flow under the insurance contract. If the assessment represent insurance liability less related deferred acquisition cost is not
adequate if compared to current estimates of future cash flows, the deficiency is recognized in the consolidated statement of comprehensive income.
x. Loans Received
Loans received are stated at amortized cost. Loans received classified as financial liability measured at amortized cost using the effective
interest rate method. Transaction costs that are directly attributable to the acquisition cost of loan received, are deducted from the loans received Note 2h.
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