PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
57
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued o. Loans and sharia receivablesfinancing continued
Loan restructuring continued In 2016, the Bank formed internal regulation regarding the debtors that are eligible to be removed
from the list of restructured loans, i.e. when the loandebtor has met the following criterias: i.
Credit quality has been categorized Current Collectibility 1 according to the review results by three 3 pillars of based on credit quality of Bank Indonesia;
ii. The interest rate charged on the current loan facility is the commercial interest rates to debtors
in accordance with the relevant credit segments above the base lending rate; iii.
There are no Deferred Delinquency Interest TBYD and Deferred Interest BYDT which were not yet collected.
The internal provisions are applied since January 1, 2016.
p. Consumer financing receivables
Subsidiary’s consumer financing receivables are recognised initially at fair value, added with directly attributable transaction costs and deducted by yield enhancing income, and subsequently measured
at amortised cost using the effective interest rate method. Subsidiary’s consumer financing receivables are classified as loans and receivables. Refer to
Note 2c for the accounting policy of financial assets for loans and receivables.
Early termination 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 profit or loss and other
comprehensive income at the transaction date. Credit restructuring can be done by transfer of financing, continue to finance, repay back, change
the due date, change the tenor andor increase the down payment. Subsidiary’s unearned consumer financing income is the difference between total installments to be
received from customers and the total financing which is recognised as income over the term of the contract using effective interest rate.
Consumer financing receivables are stated net of joint financing receivables where joint financing providers bear credit risk in accordance with its portion without recourse, unearned consumer
financing income and allowance for impairment losses. Joint financing receivables where jointly financed with other parties, bear credit risk in accordance
with their financing portion without recourse and presented on a net basis in the consolidated statement of financial position. Consumer financing income and interest expense related to joint
financing without recourse are also presented on a net basis in the consolidated statement of profit or loss and other comprehensive 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. The difference
is recognised as revenue and disclosed as “Consumer financing income”.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
58
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Net investment in lease financing
Net investment in lease financing represent lease receivable plus the residual value which is earned at the end of the lease period and 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 recognised as unearned lease income. Unearned lease income is
allocated to current year consolidated statement profit or loss and other 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 recognised in the current year consolidated statement of profit or loss and other comprehensive
income. Net investment in lease financing are classified as loans and receivables. Refer to Note 2c to the
accounting policy for loans and receivables.
r. Fixed Assets, leased assets and intangible assets i. Fixed assets and software
On April 1, 2016, the Group changed their accounting policy relating to land from cost model into revaluation model. Subsequently, land are stated at fair value.
Appraisal of the land is carried out by a certified external independent appraiser. Assessment of these assets are conducted regularly to ensure that the fair value of the revaluated asset is not
materially different from it’s carrying value.
If the fair value of the revaluated asset change significantly, it is necessary to revaluate on an annual basis, whereas if the fair value of the revaluated asset does not change significantly, it is
necessary to revaluate at a maximum every 5 years.
The increase in the carrying value arising from the revaluation of land is recorded as Difference arising from the revaluation of fixed assets and is presented as Other comprehensive income.
Any impairment arising from the revaluation is recorded as expense of the current year. If the asset had a balance of Difference arising from the revaluation of fixed assets that is presented
as Other Comprehensive Income, then the impairment difference recorded is charged against Difference arising from the revaluation of fixed assets and the rest is recognised as expense of
the current year.
