Prepaid Expenses Loans and Receivables

PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 2011 and 2010 and For the Years then Ended - 45 - Commissions due to insurance brokers, agents and other insurance companies in connection with the insurance coverage are recorded as commission expense, whereas commissions obtained from reinsurance transactions are recorded as deduction from commission expense, and are recognized in the consolidated statements of comprehensive income when incurred. If commission income is more than the total commission expense, the difference is presented as commission income in the consolidated statement of comprehensive income of the current year. 3. Recognition of Shares Administration, Underwriting and Stock Brokerage Fees and Investment Management Income Shares administration fees, stock brokerage fees and underwriting fees are recognized as income when the services for trading of securities in the stock exchange and underwriting activities are performed. Investment management income is recognized based on agreed conditions as stated in the “Collective Investment Contract”. 4. Recognition of Other Revenue and Expenses Fees and Commissions Related to Financial Instruments Commission income and expense fees associated with the acquisition of financial instruments categorized as held to maturity, loans and receivables, and available for sale, or related to a period of time and that the amount is significant, is recorded as part of the fair value of financial assets or financial liability and amortized over the period using the effective interest rate. Meanwhile, fees and commissions that are not significant in amounts are recognized as revenue when the revenue is received or expense at the time of payment. Other Fees and Commission Fees and commissions that are not related to the issuance or acquisition of financial instruments and have maturity terms in which amounts are significant, are treated as deferred income or expenses and amortized using the straight-line method over the term of the relevant transaction. Meanwhile, revenue and expense fees and commissions that are not significant are recognized immediately as income or expenses on the transaction. Other fees and commission revenues not related to credit, such as bancaassurance services, and revenues associated with import and export bank guarantee, are recognized as revenue associated with the services provided. Other Income and Expense Income from assets for lease operating lease is recognized using the straight-line method over the lease period Note 2m. Administration income incurred in relation with lease, consumer finance, and factoring transaction are recognized when earned. Other income expense are recognized when earned incurred and in accordance with their beneficial period accrual basis.