PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
The principal accounting policies adopted in preparing the consolidated financial statements of the Bank and Subsidiaries are set out below:
a. Basis of Preparation of the Consolidated Financial Statements
The consolidated financial statements have been prepared under the historical cost, except for financial assets classified as available for sale, financial assets and liabilities held at fair value
through profit or loss and all derivative instruments which have been measured at fair value. The consolidated financial statement are prepared under the accrual basis of accounting, except for
the consolidated statement of cash flows.
Consolidated statements of cash flows are prepared using the direct method by classifying cash flows in operating, investing and financing activities.
The financial statements of a Subsidiary company engaged in sharia banking have been prepared in conformity with the Statement of Financial Accounting Standards SFAS 101 Revised 2014,
“Presentation of Financial Statement for Sharia Banking”, SFAS 102 Revised 2013 “Accounting for Murabahah”, SFAS 104 “Accounting for Istishna”, SFAS 105 ”Accounting for Mudharabah”,
SFAS 106 “Accounting for Musyarakah”, SFAS 107 “Accounting for Ijarah”, SFAS 110 “Accounting for Sukuk”and other prevailing Statements of Financial Accounting Standards, as long as not
contradict with Sharia principle also Accounting Guidelines for Indonesian Sharia Banking PAPSI Revised 2013.
The preparation of consolidated financial statements in accordance with Indonesian Financial Accounting Standards requires the use of estimates and assumptions. It also requires
management to make judgments in the process of applying the accounting policies the Group. The area that is complex or requires a higher level of consideration or areas where assumptions and
estimates could have a significant impact on the consolidated financial statements are disclosed in Note 3.
All figures in the consolidated financial statements, are rounded and presented in million rupiah Rp unless otherwise stated.
b. Changes in accounting policies
Effective on January 1, 2015, the Group has applied new standards and interpretation or revision that are relevant to the Group’s operation effective from such date as follows:
- SFAS 1 revised 2013 “Presentation of financial statements”
- SFAS 4 revised 2013 “Separate financial statements”
- SFAS 15 revised 2013 “Investment in associates and joint ventures”
- SFAS 24 revised 2013 “Employee benefits”
- SFAS 65 “Consolidated financial statements”
- SFAS 66 “Joint arrangements”
- SFAS 67 “Disclosure of interests in other entities”
- SFAS 68 “Fair value measurement”
- SFAS 46 revised 2014 “Income tax”
- SFAS 48 revised 2014 “Impairment of asset”
- SFAS 50 revised 2014 “Financial instrument : Presentation”
- SFAS 55 revised 2014 “Financial instrument : Recognition and measurement”
- SFAS 60 revised 2014 “Financial instrument : Disclosures”
- IFAS 26 “Reassessment of embedded derivatives”
The above new and revised standards and interpretations have no material impact to the Bank and Subsidaries’ consolidated financial statements, except changes in consolidated the financial
statement presentation which separated items that will be reclassified to profit or loss with items that will never be reclassified to profit or loss and addition of certain disclosures.
PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of December 31, 2015 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated
33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued b. Changes in accounting policies continued
Changes in the Group’s accounting policy have been inline with the requirements in each standards and interpretation.
c. Financial instruments
A. Financial assets
The Group classifies its financial assets in the following categories of a financial assets at fair value through profit or loss, b loans and receivables, c held-to-maturity financial assets, and
d available-for-sale financial assets. The classification depends on the purpose for which the financials assets were acquired. Management determines the classification of its financial
assets at initial recognition.
a Financial assets at fair value through profit or loss This category comprises two sub-categories: financial assets classified as held for trading,
and financial assets designated by the Group as of fair value through profit or loss upon initial recognition.
A financial asset 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. A financial asset designated as fair value through profit or loss at inception are held to
back the insurance liabilities of Subsidiary measured at fair value of the underlying assets.
Financial instruments included in this category are recognised initially at fair value; transaction costs are taken directly to the consolidated statement of profit or loss and other
comprehensive income. Gains and losses arising from changes in fair value and sales of these financial instruments are included directly in the consolidated statement of profit or
loss and other comprehensive income and are reported respectively as “Unrealised gainslosses from increasedecrease in fair value of financial instruments” and
“Gainslosses from sale of financial instruments”. Interest income on financial instruments held for trading are included in “Interest income”.
b Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market, other than: - those that the Group intends to sell immediately or in the short term, which are
classified as held for trading, and those that the Group upon initial recognition designates as of fair value through profit or loss;
- those that the Group upon initial recognition designates as available for sale; or - those for which the Group may not recover substantially all of its initial investment,
other than because of loans and receivables deterioration.
