PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 518 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued n. Consumer Financing Receivables
Consumer financing receivables are stated at their outstanding balance less the portion of joint financings where the credit risk is assumed by joint financing providers in accordance with the
financings portion without recourse, unearned consumer financing income and the allowance for possible losses.
Unearned consumer financing income, which is the difference between the total installment payments to be received from consumers and the principal amount of consumer financing, and is
recognised as earned income over the term of the contract based on a constant rate of return on the net consumer financing receivables.
Administration income from consumers is recognised in the consolidated statement of income upon signing the financing contract.
Early termination of a contract is treated as a cancellation of an existing contract and the resulting gain or loss is credited or charged to the current year’s consolidated statement of income at the
date of transaction.
o. Joint Financing
Joint financing consists of with and without recourse joint financing to end-user consumers. The consumer financing receivables under joint financing where each party assumes the credit risk
according to the risk portion without recourse are stated at net amount in the consolidated balance sheet. Consumer financing income and interest expense related to without recourse joint
financing are stated at net amount in the consolidated statement of income. Consumer financing receivables under joint financing where the Subsidiary assume the credit risk with recourse are
stated at gross amount in the consolidated balance sheet. The consumer financing income and interest expense related to with recourse joint financing are stated at gross amount in the
consolidated statement of income.
For joint financing without recourse, Subsidiary has the right to set higher interest rates to customers than those as stated in the joint financing agreements with joint financing providers
which is the Bank. The difference is recognised as revenue and disclosed as “Consumer Financing Revenue”.
p. Acceptance Receivables and Payables
Acceptance receivables and payables are stated at the value of the letters of credit or realisable value of the letters of credit accepted by the accepting bank. Acceptance receivables are presented
net of allowance for possible losses.
q. Investments in Shares
Investments in shares represent long-term investments in non-publicly-listed companies an d temporary investments in debtor companies arising from conversion of loans to equity.
Investments in shares representing ownership interests of 20.00 to 50.00 are accounted for under the equity method. Under this method, investments are stated at cost and adjusted for the
Bank’s proportionate share in the net equity of the investees and reduced by dividends earned since the acquisition date net of by allowance for possible losses.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 519 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Investments in Shares continue
Temporary investments in debtor companies arising from the conversion of loans to equity are accounted for under the cost method regardless of the percentage of ownership, less an allowance
for possible losses.
All other investments are carried at cost less an allowance for possible losses. Changes in value of investments in subsidiaries which is caused by changes in the subsidiaries’
equity and is not a transaction between the Bank and the Subsidiaries, is recognised as part of the equity as “Difference in Transactions of Equity Changes in Subsidiaries”. This account will be
calculated in determining the parent companies’ profit and loss at the disposal of the investment Note 32e.
Goodwill is recognised, when there is a difference between the acquisition cost and the Bank’s portion of the fair value of identified assets and liabilities at the exchange date. Goodwill is
presented as other assets and amortised as expense over the period using the straight-line method, unless there is other method considered more appropriate in certain conditions. The Goodwill
amortisation period is 5 five years, but a longer amortisation period may be applied with maximum 20 years period with appropriate basis.
r. Allowance for Possible Losses on Earning and Non-Earning Assets
