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 536 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Murabahah receivables are the financing such goods by confirming purchase price to a buyer and the buyer pays it with a higher price as an agreed profit. Murabahah receivables are stated at the
balance of the receivable less deferred margin and allowance for possible losses.
Istishna receivables are the financing such goods in the form of manufacturing the ordered goods with the agreed criteria and specification by both of orderer or buyer Mustashni and manufacturer
or seller Shani. Istishna receivables are presented based on the outstanding billings less allowance for possible losses.
Qardh receivables are a borrowing at the condition that the borrower should repay the loan at specified period of time. The Subsidiary will obtain a free ujrah from this transaction, which is
recognized upon receipt. Qardh receivables is stated at its outstanding balance less allowance for possible losses.
Rahn represent the mortgage of goods or assets owned by the customer for an equivalent amount of money. Assets or goods mortgaged are appraised based on market value, less a certain
deduction percentage. The Subsidiary will obtain a fee ujrah, which is recognized upon receipt.
Loans are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
Loans Purchased from IBRA Bank Indonesia issued Regulation No. 47PBI2002 regarding “Prudential Principles for Credits
Purchased by Banks from IBRA” dated 27 September 2002, which applies for all loans purchased from IBRA starting 1 January 2002.
The difference between the outstanding loan principal and purchase price is booked as deferred income if the Bank enters into a new agreement with the borrower, and as an allowance for
impairment losses if the Bank does not enter into a new credit agreement with the borrower. The allowance for loan losses or deferred income can only be adjusted once the Bank has recovered the
original purchase price.
Income arising from the loans purchased from IBRA is recognised on a cash basis. If the Bank enters into a new credit agreement with the borrower, any receipts from a borrower are recognised
as a deduction of the outstanding principal andor as interest income following the terms or conditions as set out in the new credit agreement. If the Bank does not enter into a new credit
agreement with the borrower, any receipts from a borrower must be recognised firstly as a deduction of outstanding principal. The excess of receipts over the outstanding principal balance shall be
recognised as interest income.
Bank Indonesia requires banks to fully recover the purchase price of the loans within five years from the date of loan booking. Any unpaid amount after five years should be written off by the banks.
Based on the letter from Bank Indonesia No. 958DPNPIDPnP dated 16 February 2007, Bank Mandiri can continue to manage ex-IBRA loans which have passed a period of 5 years after
purchase, if the loans at the time reach 5-years period, are classified as current based on factors of business prospects, performance and the ability of debtors to pay as stipulated in the relevant BI
regulation regarding Asset Quality.
Loans purchased from IBRA are classified as financial assets in loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
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 537 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Loans continued
Loan Restructuring Loan restructuring may involve a modification of the terms of the loans, conversion of loans into
equity or other financial instruments andor a combination of both. Losses on loan restructurings in respect of modification the terms of the loans are recognised only if
the present value of total future cash receipts specified by the new terms of the loans including both receipts designated as interest and those designated as loan principal, are less than the carrying
amount at loans before restructuring. Starting from 1 January 2010, losses on loan restructuring are presented as part of allowance for impairment losses.
For loan restructurings which involve a conversion of loans into equity or other financial instruments, a loss on loan restructuring is recognised only if the fair value of the equity or financial instruments
received, deducted by estimated expenses to sell the equity or other financial instruments, is less than the carrying amount of loans.
Overdue interest, which is capitalised to loans under new restructuring agreements, is recorded as deferred interest income and is amortised proportionately based on the amount of capitalised
interest relative to the loan principal upon collection. Losses on loan restructuring are presented as part of allowance for impairment losses.
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.
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 income at the transaction date.
Subsidiary’s consumer financing receivables are classified as loans and receivables. Refer to Note 2c for the accounting policy of loans and receivables.
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 provision for doubtful accounts.
Joint financing receivables where the Subsidiary and joint financing providers bear credit risk in accordance with their portion without recourse are presented on a net basis in the consolidated
statement of financial position balance sheet. Consumer financing income and interest expense related to joint financing without recourse are also presented on a net basis in the consolidated
statement of 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”.
