PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 520 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued B. Financial liabilities
The Group classified its financial liabilities in the category of a financial liabilities at fair value through profit or loss and b financial liabilities measured at amortised cost. Financial liabilities
are derecognised from the consolidated statement of financial position balance sheets when redeemed or otherwise extinguished.
a Financial liabilities at fair value through profit or loss This category comprises two sub-categories: financial liabilities classified as held for trading,
and financial liabilities designated by the Group as at fair value through profit or loss upon initial recognition.
A financial liability is classified as held for trading if it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio of
identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short term profit-taking. Derivatives are also categorised as held
for trading unless they are designated and effective as hedging instruments.
Gains and losses arising from changes in fair value of financial liabilities classified held for trading are included in the consolidated statement of income and are reported as
“Unrealised gainslosses from increasedecrease in fair value of financial instruments”. Interest expenses on financial liabilities held for trading are included in “Interest expenses”.
If the Group designated certain debt securities upon initial recognition as at fair value through profit or loss fair value option, then this designation cannot be changed
subsequently. According to SFAS 55 Revised 2006, the fair value option is applied on the debt securities consists of debt host and embedded derivatives that must otherwise be
separated.
Fair value changes relating to financial liabilities designated at fair value through profit or loss are recognised in “Gainslosses from changes in fair value of financial instruments”.
b Financial liabilities at amortised cost Financial liabilities at amortised cost are initially recognised at fair value plus transaction
costs. After initial recognition, Group measures all financial liabilities at amortised cost using
effective interest rates method. Effective interest rate amortisation is recognised as “Interest expense”.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2011 AND 2010
Expressed in millions of Rupiah, unless otherwise stated
Appendix 521 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
c. Financial instruments continued C. Derecognition
Financial assets are derecognised when the contractual rights to receive the cash flows from these assets have ceased to exist or the assets have been transferred and substantially all the
risks and rewards of ownership of the assets are also transferred that is, if substantially all the risks and rewards have not been transferred, the Group tests control to ensure that continuing
involvement on the basis of any retained powers of control does not prevent derecognition. Financial liabilities are derecognised when they have been redeemed or otherwise extinguished.
Collateral furnished by the Group under standard repurchase agreements and securities lending and borrowing transactions is not derecognised because the Group retains substantially all the
risks and rewards on the basis of the predetermined repurchase price, and the criteria for derecognition are therefore not met.
D. Reclassification of financial assets
Group shall not reclassify any financial instrument out of or into the fair value through profit or loss category while it is held or issued.
The Group shall not classify any financial assets as held-to-maturity if Group has, during the current financial year or during the two preceding financial years, sold or reclassified more than
an insignificant amount of held-to-maturity financial assets before maturity more than insignificant in relation to the total amount of held-to-maturity financial assets other than sales
or reclassifications that:
a are so close to maturity or the financial assets call date that changes in the market rate of interest would not have a significant effect on the financial assets fair value;
b occur after the Group has collected substantially all of the financial asset s original principal
through scheduled payments or prepayments; or c are attributable to an isolated event that is beyond the Groups control, is non-recurring and
could not have been reasonably anticipated by the Group. Reclassification of financial assets from held to maturity classification to available for sale are
recorded at fair value. Unrealised gains or losses are recorded in the consolidated statement of comprehensive income and shall be recognised in the consolidated statement of comprehensive
income until the financial assets is derecognised, at which time the cumulative gain or loss previously recognised in the consolidated statement of comprehensive income shall be
recognised in consolidated statement of income.
