PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 42 - An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs to
sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of
continuing operations are recognized in the consolidated statement of comprehensive income as “impairment losses”. In assessing the value in use, the estimated net future cash
flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, recent market transactions are taken into account, if available.
If no such transactions can be identified, an appropriate valuation model is used to determine the fair value of the assets. These calculations are corroborated by valuation
multiples or other available fair value indicators.
Impairment losses of continuing operations, if any, are recognized in the interim consolidated statements of comprehensive income under expense categories that are consistent with
the functions of the impaired assets.
An assessment is made at each annual reporting period as to whether there is any indication that previously recognized impairment losses recognized for an asset other than goodwill
may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset other than
goodwill is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is
the case, the carrying amount of the asset is increased to its recoverable amount. The reversal is limited so that the carrying amount of the assets does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
Reversal of an impairment loss is recognized in the consolidated statement of comprehensive income. After such a reversal, the depreciation charge on the said asset is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
y. Deposits and Deposits from Other Banks
Deposits are liabilities to customers in the form of demand deposits, savings deposits and time deposits.
Demand deposits represent deposits of customers which may be used as instruments of payment, and which may be withdrawn at any time by cheque, or other orders of payment or
transfers. Demand deposits are stated at the amount due to the demand deposit account holders.
Savings deposits represent deposits of customers which may only be withdrawn when certain agreed conditions at the account opening are met. These deposits may not be
withdrawn by cheque or other equivalent instruments, except by using specific withdrawal slip which can only be validated at the depository bank. Savings deposits are stated at the
amount due to the savings account holders. Time deposits represent deposits of customers which may only be withdrawn after a certain
time in accordance with the agreement with the customers at the time of placement, or the customers will be fined or penalized if withdrawals are made before maturity. Time deposits
are stated at the nominal amount due to the time deposit account holders.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2011 and 2010 and For the Years then Ended
- 43 - Deposits include syariah deposits and unrestricted investments consisting of:
• Savings Wadiah is entrusted funds in the form of savings where income fund owners get a bonus.
• Unrestricted investments in current accounts, savings and time deposits represent deposits of customers funds that provide benefits for the owner of funds from Islamic
unit revenue for the use of these funds in accordance with the ratio determined and approved previously.
Deposits from other banks are liabilities to other banks in the form of demand deposits and call money less thanor 90 days and time deposits with original maturities of each
agreement.
z. Liability for Future Policy Benefits
Liability for future policy benefits represents the present value of estimated future policy benefits to be paid to policyholders or their heirs less present value of estimated future
premiums to be received from the policyholders, recognized consistently with the recognition of premium income. Liability for future policy benefits is stated in the consolidated statement
of financial position in accordance with actuarial calculation. The increase decrease in liability for future policy benefits is recognized as an expense income in the current year.
aa. Stock Issuance Costs
Stock issuance costs are deducted from the additional paid-in capital portion of the related proceeds from issuance of shares and are not amortized.
ab. Recognition of Revenues and Expenses
1. Recognition of Interest Revenues, Interest Expenses, Sharia Revenue, and Revenue Sharing Distribution
Interest Revenue and Interest Expenses Interest income and interest expense for all financial instruments are recognized in the
consolidated statement of income on accrual basis using the effective interest rate method.
Transaction costs that occur and are directly attributable to the acquisition or issuance of financial instruments not measured at fair value through profit and loss are amortized
over the life of financial instruments using the effective interest rate method and recorded as part of interest income for financial assets directly attributable transaction
costs, and as part of interest expense related to transaction costs of financial liabilities. If a financial asset or group of similar financial assets in the category are held to
maturity, loans and receivables, and available for sale are impaired, the interest income earned after the impairment loss is recognized based on the interest rate used for
discounting future cash flows in calculating impairment losses.
Revenue and ExpenseProfit Sharing Sharia Revenue consists of income from murabahah sharia, income from ijarah assets lease,
and from the results of financing.
