NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 531 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
j. Marketable Securities continued
Reclassification of marketable securities to held to maturity classification from available for sale are recorded at fair value. Unrealised gains or losses are recorded in the equity section and will be
amortised up to the remaining live of the marketable securities using the effective interest rate method to consolidated statement of comprehensive income.
k. Government Bonds
Government Bonds represent bonds issued by the Government of the Republic of Indonesia. Government Bonds consists of Government Bonds from the recapitalisation program and
Government Bonds purchased from the market.
Government Bonds are classified as financial assets at fair value through profit or loss, available for sale and held to maturity. Refer to Note 2c for the accounting policy of financial assets at fair value
through profit or loss, available for sale and held to maturity.
l. Other Receivables - Trade Transactions
Other receivables - Trade Transactions represent receivables resulting from contracts for trade- related facilities given to customers, which will be reimbursed on maturity.
Other receivables - Trade Transactions are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
m. Securities PurchasedSold under ResaleRepurchase Agreements
Securities purchased under resale agreements are presented as assets in the consolidated statement of financial position at the agreed resale price less unamortised interest income and
allowance for impairment losses. The difference between the purchase price and the agreed selling price is treated as deferred unamortised interest income and amortised as income over the period,
commencing from the acquisition date to the resale date using the effective interest rate method.
Securities purchased under resale agreements are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
Securities sold under repurchase agreements are presented as liabilities in the consolidated statement of financial position at the agreed repurchase price net of the unamortised prepaid
interest. The difference between the selling price and the agreed repurchase price is treated as prepaid interest and recognised as interest expense over the period, commencing from the selling
date to the repurchase date using effective interest rate method.
Securities sold under repurchase agreements are classified as financial liabilities at amortised cost. Refer to Note 2c for the accounting policy for financial liabilties at amortised cost.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2012 AND 2011
Expressed in millions of Rupiah, unless otherwise stated
Appendix 532 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
n. Derivative Receivables and Derivative Payables
All derivative instruments including foreign currency transactions for funding and trading purposes are recognised in the consolidated statement of financial position at their fair values. Fair value is
determined based on market value using Reuters rate at reporting date or discounted cash flow method.
Derivative receivables are presented at the amount of unrealised gain from derivative contracts, less allowance for impairment losses. Derivative payables are presented at the amount of unrealised loss
from derivative contracts.
Gains or losses from derivative contracts are presented in the consolidated financial statements based on its purpose designated upon acquisition, as 1 fair value hedge, 2 cash flow hedge, 3
net investment in a foreign operation hedge, and 4 trading instruments as follows:
1. Gain or loss on a derivative contract designated and qualifying as a fair value hedging
instrument and the gain or loss arising from the changes in fair value of hedged assets and liabilities is recognised as gain or loss that can be set off one another during the same
accounting periodyear. Any difference representing hedge ineffectiveness is directly recognised as gain or loss in the consolidated statement of income in current year.
2. The effective portion arising from gain or loss of derivative contracts, which are both designated
and qualify as a cash flow hedge instruments is reported as other comprehensive income. The hedge ineffectiveness portion is recognised as a gain or loss in the current year consolidated
statement of income.
3. Gain or loss arising from derivative contract that is designated, qualifies as a net investment
hedge in a foreign operation and that is highly effective is reported as other comprehensive income, as long as the transactions are effectively recognised as hedge transactions.
4. Gain or loss arising from derivative contract not designated as a hedging instrument or
derivative contract that does not qualify as a hedging instrument is recognised in the current year consolidated statement of income.
Derivative receivables are classified as financial assets at fair value through profit or loss, meanwhile derivative payables are classified as financial liabilities at fair value through profit or loss.
Refer to Note 2c for the accounting policy of financial assets and liabilities at fair value through profit or loss.
o. Loans
Loans represent agreement to provide cash or cash equivalent based on agreements with borrowers, where borrowers are required to repay their debts with interest after a specified period,
and matured trade finance facilities which have not been settled within 15 days.
Syndicated loans, direct financing and joint financing, and channeling loans are stated at their outstanding balances in proportion to the risks borne by the Bank and its Subsidiaries.
Included in loans are financing by Bank Syariah Mandiri “BSM”, a Subsidiary, in the form of sharia receivables, financing and funding.
