Professional Documents
Culture Documents
31
(year 2000 revision)
the paragraphs printed in bold and italic letters are standard paragraphs, which must
be read in the context of explanatory paragraphs and the implementation guide. there
is no requirement to apply this statement on matters considered to be immaterial.
introduction
background
(b) banking is a very important and influential sector in the business world. many
people and organizations utilize bank services to deposit or borrow funds.
therefore, banks play an important role in maintaining public trust on the
monetary system through their close relationship with the regulatory bodies
and government agencies. within the framework of maintaining the public
trust, the government issue many regulations in the banking sector. it is
understandable if there is a wide concern on the health of the banks,
particularly with respect to the liquidity and solvency of the banks and the
relative degree of risk inherent to the types of business performed by the
related banks. accordingly the accounting and reporting of banks differ from
the other commercial companies. this standard recognizes and accommodates
these differences. this standard also encourages the disclosures, in the
financial statements, related to matters such as the management and control of
liquidity and risks.
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(c) the users of the bank’s financial statements require information, which are
understandable, relevant, reliable and comparable in evaluating the financial
position and performance of the bank and useful in making economic
decision. the users also require better information on the specific
characteristics of the bank’s operations. the users, including the regulatory
authority, require information which are not available to the public. although
the bank represents a subject of supervision, and the bank’s management has a
regulatory authority for not providing certain information to the public, an
overall and adequate disclosure is required so that the financial statements of
the bank are in conformity with the requirements of the users, within a proper
limit to be met by management.
(d) the users of the bank’s financial statements are interested with the liquidity,
solvency and the risks related to the assets and liabilities recognized on the
balance sheet and the components outside the balance sheet. liquidity shows
the capability of the bank to fulfill its liabilities to all parties who withdraw or
cash their deposits and other commitments at any time. solvency indicates the
excess of assets over liabilities, which also shows the adequacy of the bank’s
capital. the bank’s business is sensitive to various risks, such as liquidity risk,
foreign currency fluctuation risk, interest rates, changes in market prices and
failures of parties having commitments with the bank. these risks may have
been reflected in the financial statements. however, the users will have a
better understanding if management also discloses the management and
control of these risks together with the bank’s operations in the financial
statements.
objective
scope
(g) this statement does not regulate the accounting treatment of specific
transactions of banks which perform business activities based on the
syariah (islamic law) principles. the accounting treatment of specific
transactions of a syariah division shall refer to the sfas regulating the
accounting for syariah banking.
(h) matters of a general nature which are not regulated in this statement, shall
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be treated by reference to the other statements of financial accounting
standard or generally accepted accounting principles.
(i) this statement is not a regulation for the presentation of report for the
government, independent supervisory institution and bank indonesia (the
central bank).
(j) the provisions of the law and regulations may require a report which is
different from the generally accepted accounting principles. the financial
statements presented based on this statement are not intended to fulfill such
law and regulations.
definitions
productive assets are the investments of the bank’s funds either in rupiah or
foreign currencies in the forms of credits, marketable securities, securities
purchased with a promise to be resold (reserve repo), derivative receivables,
acceptance receivables, placements of funds with other banks, participation,
etc.
bank is an enterprise which accumulates funds from the public in the form of
deposits and channels them to the public in the form of credits and or other
form within the framework of enhancing the living standard of the people.
estimated commitment losses and contingency are estimated losses due to the
non-fulfillment of commitments and contingencies by the customers.
cash are currency bills and coins, either rupiah as well as foreign currencies,
which are still valid as a valid means of payments.
included in the definition of cash are rupiah and foreign currencies withdrawn
from circulation, which are still during the transition period to be exchanged at
bank indonesia or the central bank of the related country. not included in the
definition of cash are gold bars and commemorative coins.
immediate liabilities are the bank liabilities to other parties which must be paid
immediately in accordance with the order of the trustee or a predetermined
agreement.
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examples of immediate liabilities are among others: transfers, receipt of tax
through the bank which must be deposited, deposits matured but not yet taken by
customer and interest payable.
contingency is a condition or situation with the end result in the form of a gain
or loss that can only be confirmed after the occurrence of one or more events.
credit is the loan of money or similar receivable based on a borrow and loan
agreement between the bank and another party which obligates the borrower to
settle his debt after a certain period of time with an amount of interest,
compensation or profit share. included in the definition of credit is credit
provided under a joint financing, credit for the safeguarding and purchase of
the customer’s securities under the note purchase agreement (npa).
placement with other banks is an investment of bank’s funds with other banks,
either domestically as well as abroad, in the form of inter-bank call money,
savings, and time deposits and other of the same type intended to generate
income.
loans received are funds received from the bank, bank indonesia or other
parties with a requirement for repayment in accordance with the terms
stipulated in the agreement. subordinated loans and public deposits are not
included in this definition.
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net foreign exchange position is:
(l) the net difference of monetary assets and liabilities in foreign currencies
and,
(m) the net difference of commitment and contingent receivables and
liabilities in foreign currencies.
deposits are funds entrusted by the public (excluding banks) to the bank based
on a fund deposit agreement.
(n) current account, namely a deposit of other parties with the bank, the
withdrawal of which can be made at any time using a check, a giro bilyet, an
atm card, other means of payment order or through book transfer.
(o) savings are deposits of other parties with the bank, the withdrawal of which
can only be made according to certain agreed upon conditions, but cannot be
withdrawn by check, giro bilyet or other means equivalent thereto.
(p) deposits are deposits of other parties with the bank, the withdrawal of which
can only be made at a certain time according to the agreement between the
depositor and the related bank.
(q) certificate of deposit is a time deposit, the evidence of deposit of which can
be transferred to another party.
(r) other forms equivalent to a form of deposit (a-d).
credits
(s) a credit shall be recognized at the time of cashing in the amount of the
principal of the credit. credit under a joint financing shall be recognized in
the amount of the principal of the credit which represents the portion of
receivable of the related bank.
(t) under the definition of the principal of the credit interest and other expenses
paid in advance are not included. the funds for a joint financing for a
customer are provided by more than one bank. therefore, the principal of the
credit recognized is only in the amount of the portion of the receivable of the
related bank.
(u) credit granted with a credit channeling agreement shall be recognized in the
amount of the portion of credit, the risk on which is borne by the bank.
(v) the risk on credit granted to a customer with a channeling agreement probably
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is not fully guaranteed by the government/other funds provider. the risk on
credit which is not guaranteed by the government/other funds provider
becomes the risk which must be borne by the bank. accordingly, the bank
must recognize the credit in the amount of the portion of credit, the risk of
which is borne by the bank. examples of types of credit with credit
channeling agreement are a.o. : partnership credit, credit for the elimination of
poverty, credit for development of small businesses, credit originating from
foreign countries and government investment funds. similarly, in a syndicated
credit of several banks, each bank shall only recognizes the credit in the
amount of the risk it bears.
(w) the provision for losses on credit shall be established in the amount of the
estimated losses from non-collectible credits in accordance with the
denominated currency.
(y) the amount of credit that can be written off is the portion which cannot be
collected. a collateral taken over in respect of the settlement of the loan shall
be valued at the realizable net value.
(z) the recognition of income and interest expense is very fundamental and
become the main base for the determination of the bank’s profitability. the
main activity of the bank is the accumulation of funds which is generally
interest bearing and invest them in productive assets. as in other industries, in
banking there is also a probability of timing difference between the receipt of
income and the occurrence of expenses on the use of resources to produce
such income. therefore, matching of income and bank expenses is not easy;
so that in recognizing income and expenses the characteristics of the bank’s
business shall be considered.
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(bb) interest income from credit activities is made up of interest income and other
income, such as provision and commission. income from non-performing
productive assets that has not been received yet cannot be recognized during
the reporting period.
(cc) at the time a credit is classified as non-performing, interest which has been
recognized but not collected yet must be cancelled.
(dd) if a cancellation is made on interest already recognized but not collected yet,
the cancellation will reduce interest income already recognized.
(ee) non-performing credits are generally credits, the payments of principal and
interest on which have been overdue for 90 days or more after the due date or
credit with a significant doubt of the timely receipts of payments. non-
performing credits consist of credits classified as less than current credits,
doubtful and stagnant.
(ii) interest expenses in credit activities consist of interest expense and other
expenses incurred within the framework of funds accumulation such as gifts,
premium or discounts on time contract for financing and expenses/premium
for a guarantee program.
(jj) income and expenses other than interest which are related to a time period
shall be recognized during such period.
(kk) income and expenses other than interest which are related to a time period are
a.o, commission and provision from activities related to credits.
(ll) if such credit or commitment is settled before its time period, the balance of
income and expenses shall be recognized at the time of the settlement of the
credit or commitment.
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credit restructuring
(mm) a restructured credit may cover interest and other expenses converted into
the credit principal.
(nn) the recognition of income on interest receivable converted into the credit
principal within the frame work of restructuring shall be made in
conformity with sfas 54 regarding restructuring of problematic debts.
(rr) a credit collateral taken over shall be recognized the net realizable value.
(ss) the net realizable value is the fair value of the collateral after deducting
estimated cost of disposal.
(tt) the difference between the value of the collateral taken over and the sale
proceed thereof shall be recognized as profit or loss at the time of the sale of
the collateral.
(uu) a recovery of credit which has been written off shall be recognized as an
adjustment to the provision for credit losses at the amount of the principal.
if the recovery exceeds the principal amount, the excess shall be recognized
as interest income.
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(vv) a recovery of a credit which has been written off may consist of a recovery
of principal and credit interest which have been written off. in accordance
with the rules in paragraph 25 a recovery of credits classified as doubtful
and stagnant, which have been written off, shall the recognized as an
adjustment to the provision for credit losses in the amount of the principal.
any excess of the recovery over the principal shall be recognized as interest
income.
(ww) the bank shall classify securities(debt securities and equity securities) at the
time of acquisition into one of the following three groups:
(xx) held to maturity;
(yy) trading; or
(zz) available for sale
(aaa) generally a bank does not have stock securities for trading as it is not
allowed by prevailing regulations. stock securities are only held by banks
for long term investment, so that stock securities shall still be valued in
accordance with sfas 13 paragraph 39 and sfas 15 paragraph 20.
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(eee) in a sale transaction of a security with a promise to repurchase, the bank sells
the security to a third party at a certain price and promises to repurchase it
within a certain period at a certain higher price. under this transaction the
ownership of the security remains with the seller bank and shall continue to be
presented as inventory of the bank’s security portfolio.
(hhh) the fair value shall be estimated based on market price, pricing models or
the market price of another instrument having similar characteristics.
(iii) profit or loss from a foreign currency transaction due to a change in the
market price of a derivative shall be recognized as income or expense
during the period of occurrence.
(kkk) the bank activities in the export and import transactions mainly relate to the
issuance, receiving and administering letters of credits (l/c). an l/c instrument
is issued by the issuing bank at the request of its customer who authorized the
receiving individual or company to request payment from the issuing bank
through one of its correspondent banks based on the terms and conditions
contained in the l/c. based on the method of payment settlements, there are
four types of l/c, namely:
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l/c export financing
(lll) at the time of receiving an l/c from the bank, the bank administers the l/c
received and such transaction does not yet represent a commitment or
contingency.
55. at the time the l/c is paid by the paying bank to the beneficiary at the l/c value
or realization value, the paying bank shall recognize it as a receivable from the
issuing bank at the same value.
(mmm) at the time the l/c payment is due, the paying bank pays the l/c beneficiary
the l/c value or the realization value and the paying bank shall recognize it
as a receivable from the issuing bank at the same value.
acceptance l/c
(ooo) a the time the l/c payment is due, the paying bank pays the l/c beneficiary
the l/c value or the realization value and the paying bank shall recognize it
as a receivable from the issuing bank at the same value.
negotiation l/c
(qqq) the negotiating bank pays the l/c beneficiary using its own funds (as advance
payment to the l/c beneficiary) the amount of the l/c value or realization value
after a discount and shall recognize it as a receivable from the issuing bank at
the same value.
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(rrr) the negotiating bank makes payment to the l/c beneficiary with a right of
recourse, unless the status of the negotiating bank is also a confirming bank.
in case the negotiating bank negotiates a time draft, then after the negotiation
is made (payment) an acceptance of the time draft is requested from the
accepting bank.
(sss) at the opening of the l/c, the issuing bank shall recognize the transaction as a
commitment liability for an irrevocable l/c and as a contingent liability for a
revocable l/c at the nominal value of the agreed contract.
(ttt) in case the l/c issued by the issuing bank is realized by the l/c beneficiary, the
issuing bank has a liability to the paying bank in the amount of the l/c value
or the realization value and at the same time shall be recognized as a
receivable from the applicant at the same amount.
(uuu) the case the l/c issued by the issuing bank is realized by the l/c beneficiary, the
issuing bank has a liability to the paying bank at the amount of the l/c value or
the realization value and at the same time shall be recognized as a receivable
from the applicant at the same amount.
(vvv) in case the l/c applicant provides a promissory note, the applicant has a
liability to the l/c beneficiary in the amount of the value of the promissory
note at the time the l/c payment becomes due.
(www) in case the promissory note is guaranteed by an aval by the issuing bank, then
the issuing bank as the avalis has a liability to the l/c beneficiary at the amount
of the value of the promissory note.
(xxx) in case the promissory note is guaranteed by an aval not by the issuing bank,
then the aval guaranteeing bank shall recognize a liability to the l/c
beneficiary a the amount of the value of the promissory note and at the same
time shall recognize a receivable from the aval applicant at the same amount.
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acceptance l/c
(yyy) in case the l/c issued by the issuing bank is realized by the l/c beneficiary, the
issuing bank has a liability to the paying bank at the amount of the value of
the l/c or the realization value and at the same time shall be recognized as a
receivable from the applicant at the same amount.
(zzz) in case the accepting bank (the issuing or the non-issuing bank) accepts a time
draft issued by the l/c beneficiary, the accepting bank shall recognize a
liability to the l/c beneficiary (issuer of the draft) at the value of the draft
accepted and shall recognize a receivable from the applicant for the
acceptance at the same amount.
(aaaa) in case the accepting bank (the issuing or the non-issuing bank) accepts a time
draft issued by the l/c beneficiary and the draft has been discounted with a
discounting bank, then the accepting bank shall recognize a liability to the
discounting bank in the amount of the value of the accepted draft and at the
same time shall recognize a receivable from the applicant for the acceptance at
the same amount.
negotiation l/c
(bbbb) in case an l/c issued by the issuing bank is realized by the l/c beneficiary, then
the issuing bank has a liability to the negotiating bank at the amount of the l/c
value or the realization value and at the same time shall be recognized as a
receivable from the applicant at the same amount.
(cccc) in case the negotiating bank negotiates a time draft, then the accepting bank
(the issuing or non-issuing bank) shall accept the time draft based on the
request from the negotiating bank.
73. income and expenses related to a time period shall be recognized during the
time period. income and expenses that are not related to a time period shall be
recognized at the time of occurrence of the transaction during the related
period.
74. bank’s activities that are not related to credits consist of activities related to a time
period and activities not related to a time period. income and expenses related to
a time period are, a.o. commission and provision from activities not related to
credits. while, income and expenses not related to a time period are a.o money
transfer transaction, opening of l/c, sale of traveler checks, automatic teller
machine and issuance of bank draft.
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transactions of public fund accumulation
75. in the activities for accumulation of public fund, the bank sells its deposit
products to the customers a.o in the form of current accounts, deposits and
certificates of deposits with difference periods of maturity dates.
(jjjj) the bank shall establish the estimated loss which shall be established based on
the quality of the commitments and contingencies after deducting the
estimated net realization of the collateral. the quality of commitments and
contingencies shall be valued by considering the business prospect, financial
conditions and payment capabilities of the customers.
(kkkk) commitments and contingencies in the bank activities include, a.o: the
issuance of guarantee, the granting of credit facilities, irrevocable l/c’s, draft
issuance facilities, standby l/c’s, and interest income from non-performing
productive assets which have not been recognized as income during the
current period.
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presentation and disclosure
balance sheet
(rrrr) the bank shall present assets and liabilities on the balance sheet based on
their characteristics and list them in the order of liquidity.
(ssss) by considering the provisions regulated in other sfas’s. the presentation on the
balance sheet or disclosures in the notes to the financial statements cover, but
are not limited, to the following components of assets, liabilities and equity.
assets
cash
liabilities
immediate liabilities
savings
savings of other banks
securities sold with a promise to be repurchased
derivative liabilities
acceptance liabilities
securities issued
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loans received
estimated losses of commitments
and contingencies
other liabilities
subordinated loanss
equity
paid in capital
additional paid in capital
retained earnings
(tttt) items with a material value which cannot be classified into the above groups
of assets and liabilities shall be presented separately.
(uuuu) a most useful approach in classifying assets and liabilities is through the
grouping of assets and liabilities based on their characteristics and present the
assets and liabilities in the order which more or less reflects their liquidities.
the order of liquidity shall broadly be the same as the order of maturities.
current and non current accounts are not presented separately as most of the
assets and liabilities of a bank can be realized or settled in the near future.
(vvvv) the users of the financial statements require information which can describe
the relation and dependency of the bank to various parties, such as other
banks, other money market players and depositors. accordingly, the bank
shall disclose separately:
(aaaaa) generally a bank does not know the holders of its certificates of deposits, as
the certificates are traded in the free market. accordingly, the bank shall
disclose separately deposits obtained through the issuance of certificate of
deposits or other valuable papers which can be negotiated.
(bbbbb) the amounts of assets and liabilities presented in the balance sheet should
not be mutually offset with other liabilities or assets, unless legally allowed
and such offset reflects the estimated realization or settlement of the assets
or liabilities.
(ccccc) the provision for losses of productive assets established shall be presented as
offsetting account of each type of the related productive asset.
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(ddddd) in case of a credit restructuring, the gross amount of credit includes the
credit principal, interest and other expenses converted into the credit
principal.
(eeeee) the bank shall present its profit and loss statement by grouping income and
expenses according to their characteristics and prepared in a multiple step
form which reflects income and expenses from the main activity of the bank
and from other activities.
(fffff) the profit and loss of a bank shall present in details the components of income
and expenses and shall differentiate the components of income and expenses
originating from operating and non-operating activities.
(ggggg) with due regard to the provisions dealt with in other sfas’s, the presentation
in the profit and loss statement or the disclosures in the notes to the
financial statements, shall cover, but are not limited to the following
components of income and expenses:
interest income
interest expenses
commission income
commission and provision expenses
profit or loss from the sale of securities
profit or loss from investment in securities
profit or loss from foreign currency transactions
dividend income
other operating income
provision expenses for losses of credits and other productive assets
general administrative expenses, and other operating expenses
(hhhhh) the major types of income from the operations of a bank are a.o interest
income, commission and provision income, and other services income. each
type of income shall be disclosed separately so that the users can assess the
bank performance. such disclosure represents additional disclosure, in
addition to those required by sfas no. 5 financial information reporting by
segments.
(iiiii) the major types of expenses from the operations of a bank are a.o. interest
expense, commission expense, provision expense of losses of productive
assets, expenses related to the reduction of the carrying value of investments
and general administrative expenses. each type of expense shall be disclosed
separately so that users can assess the bank’s performance.
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(jjjjj) income and expense accounts should not be mutually offset, except those
related to hedging transaction and assets and liabilities which are mutually
offset as regulated in paragraph 87.
(kkkkk) mutual offset shall be performed carefully. not all accounts can be mutually
offset. an inappropriate mutual offset may cause difficulties to the users of the
financial statements in understanding the performance of various bank
activities and the degree of recovery obtained from certain types of assets.
(lllll) profits and losses arising from the followings may be reported on a net basis:
(a). a sale and a change in the carrying value of a security,
(b). a sale of a participation in securities investment, and
(c). transactions in foreign currencies.
(nnnnn) the net value of interest represents the difference between interest income and
interest expense. management is recommended to disclose the average
interest rate, the average value of assets generating interest and the average
value of interest bearing liabilities during the related period. if the
government provides assistance to the bank in the form of funds or credit
facilities with an interest rate which is lower than the market interest rate,
management is recommended to disclose such assistance and its effect on net
profit.
(ooooo) the report on changes in equity shall be presented accordance with sfas no.
1 presentation of the financial statements.
(ppppp) the report on changes in equity shall present the increase or decrease of net
assets or the wealth of the bank during the related period based on certain
principles of measurement adopted and must be disclosed in the financial
statements.
(qqqqq) the cash flow report shall be presented in conformity with sfas no. 2
regarding the cash flow report and must be prepared on a cash basis during
the reporting period.
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(rrrrr) cash and cash equivalents consist of:
(a). cash
(b). current account with bank indonesia, and
(c). current accounts with other banks
(sssss) considering that a bank has a very tight liquidity compared to other companies
in general, placements which will mature within a period of 3 months or less
from the date of acquisition are not included in this calculation
(ttttt) the notes to the financial statements must be presented in a systematic basis.
each item on the balance sheet, profit and loss statement and cash flow report
which needs to be explained must be supported by information contained in
the notes to the financial statements. with due regard to the provisions in
other sfas’s, the notes to the financial statements shall disclose, but not limited
to, the matters contained in paragraphs 94 to 121 inclusive.
(uuuuu) the bank must disclose an analysis of assets and liabilities by groups of
maturity dates based on the periods remaining after the balance sheet date
until the maturity dates.
(vvvvv) one of the basic things in the management of the bank’s risk is the
management of the balance/conformity of assets and liabilities, including the
management of maturity gap and the interest risk spread. generally, it is not
customary for a bank to achieve a perfect balance/conformity since its
transactions often contain different requirements. an imbalance position has
the potential to increase profit, but can also raise the risk of losses.
(wwwww) the maturity of assets and liabilities and the capability to replace, at a fair
expense, an interest bearing liability on its maturity date represent important
factors in evaluating the bank liquidity and its exposure to changes in interest
rate and exchange value. to provide relevant information for the evaluation of
the bank’s liquidity, a bank must at a minimum disclose an analysis of assets
and liabilities by groups of maturity dates.
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(xxxxx) the grouping of the maturity dates of each asset and liability for each bank
differs and the application will also differ for certain types of assets and
liabilities. examples of the time period used as a base for grouping are:
(a). up to 1 month
(b). more than 1month up to 3 months
(c). more than 3 months up to 1 year
(d). more than 1 year up to 5 years, and
(e). more than 5 years
the periods are often combined. for example, loan and advances are grouped
between those maturing less than 1 year and 1 year or more. if the loan or
advance repayments are made gradually over a time period, each installment shall
be allocated to the agreed period or to the period, during which payment is
expected to be made or received.
(yyyyy) it should be noted that the maturity periods used by the bank are the same for
purposes of the grouping of assets and liabilities. this will assist the analysis
of maturity gap as well as the bank’s dependency on other sources of liquidity.
the best method to determine the liquidity of a bank is through the performance of
an analysis of the maturity of assets and liabilities based on the periods remaining
until the date of settlement. in providing information regarding business strategy
and funding, the bank also discloses the maturity analysis based on the period as
agreed until the date of settlement. in addition, to show the exposure to the
interest rate risk, the bank can also make a grouping based on the period
remaining until an anticipate date of change in interest rate. in the notes to the
financial statements management can also disclose information on the interest rate
risk and steps taken to manage and control the risk.
(aaaaaa) a deposit with a bank can be withdrawn at any time and advances provided by
the bank can be settled any time. however, in practice, the deposits and
advances are often managed until a long period of time without any
withdrawal or settlement, so that the date of settlement is effectively longer
than the date according to the contract. a bank performs its analysis based on
the maturity period according to the contract, although the settlement period
based on the contract is often not the effective period, since the date according
to the contract reflects the liquidity risk inherent to the assets and liabilities of
the bank.
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(bbbbbb) several assets of the bank have no maturity dates agreed. therefore, it is
usually assumed that they will be mature on the anticipated date the assets will
be realized.
116. with respect to commitments, contingent liabilities and off balance sheet items,
the bank must disclose the followings:
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other banks, corporate guarantees received by the bank and ongoing
revocable l/c’s.
(iv). bank guarantee or collateral issued on a syndicated basis in the
amount of the market share of the guarantee by the related bank.
(v). self-liquidating and short term trade arising from the movements of
goods, such as documentary credit arising when the goods shipped
are used as collateral.
(vi). interest income in a settlement which represents calculated interest
from non-performing productive assets which can not be recognized
yet as interest income during the current period.
117. sometimes a bank perform a transaction which does not result in a recognition of
assets and liabilities on the balance sheet, but results in commitments and
contingencies. such balance sheet items often constitute an important part of the
business of a bank and can have a significant effect on the degree of risk faced by
the bank. these items may increase or decrease other risks, for example when the
bank performs a hedging activity on assets and liabilities on the balance sheet. off
balance sheet items may arise from transactions performed by the bank for its
customers or from the trade position of the bank itself.
118. the users of the financial statements need to know the irrevocable commitments
and contingencies of a bank, since such commitments and contingencies may
affect the liquidity and solvency of the bank and may cause a probability of loss to
the bank. the users also require sufficient information regarding the description
and amounts of off-balance sheet transactions performed by the bank.
119. the bank must disclose significant concentration of assets, liabilities and off-
balance sheet items. the disclosure may be made based on geographical areas,
groups of customers or industries or other concentrations of risks. the bank
must also disclose significant foreign currency risks.
120. the bank shall disclose the concentration of the distribution of assets and the
significant sources of its liabilities, since these represent a useful indication of the
potential risk contained in the realization of assets and funds available to the bank.
the disclosure of the concentration shall be made based on geography, customer
groups or industry group or other concentration of risks which is in conformity
with the condition of the bank. the bank also needs to present similar analysis and
explanation for off-balance sheet items. a geographical area may cover a country,
a group of countries, or an area within a country (for example provinces or cities),
groups of customers can be divided by sectors such as: government or private.
the provision on the disclosure is implemented as a supplement to the provisions
regulated in sfas no. 5 regarding reporting of financial information by segments.
121. a disclosure of the risk related to foreign currencies also represent a useful
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indication of the risk of loss due to changes in the exchange value.
credits
123. the bank must disclose the total amount of guaranteed liabilities, the
characteristics and the carrying values of assets placed as collateral.
derivative instruments
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treatment of various derivative instruments and recognition of
income as well as the valuation method and adjustment market
prices.
trustee activities
125. under a trustee activity or an activity with a similar legal base, the asset placed
under the trusteeship or entrusted is not the asset of the bank, so that it is not
recorded on the balance sheet.
126. a bank sometimes act as a trustee or perform other trust activities by controlling or
managing an asset on behalf of an individual, foundations, pension fund or other
institutions. if the bank acts as a trustee, the bank must disclose a description of
such activity due to the risk of liability which may arise if the bank fails in its
trustee activities. it should be noted that a safe custody function is not included in
the scope of the trustee’s activities.
127. the bank must disclose types of transactions, the amounts of placements and
types of currency of inter bank placements.
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(ffffff) matters related to securities shall be disclosed in the notes to the financial
statements in accordance with sfas no. 50 regarding accounting for
investments in certain securities with the following additional disclosures:
(gggggg) types and amounts of the nominal values of the securities
(hhhhhh) market price
(iiiiii) types of currency
(jjjjjj) group of issuer (government, bank and other companies)
(kkkkkk) rating of the securities, and
(llllll) collectibility
130. in addition to the disclosures required in sfas no. 1 (1998 revision) the bank
must disclose details of loans received regarding:
(pppppp) types of loans received
(qqqqqq) types of currencies (rupiah and foreign currencies).
(rrrrrr) accompanying commitments, and
(ssssss) the value of bank assets placed as collateral
131. the bank must disclose the types of currency (rupiah and foreign currencies)
and the accompanying commitments of subordinated loans received.
132. the bank must disclose the net foreign currency position by types of currencies.
133. the bank must disclose the information in the notes to the financial statements
as explained in this statement and other sfas’s, the bank is also obligated to
disclose in a separate note other activities and information, a.o. covering:
(tttttt) the trustee activities,
(uuuuuu) custodianship,
(vvvvvv) channeling of management credits; and
(wwwwww)capital adequacy ratio
(xxxxxx) ratio of classified productive assets to total productive assets
(yyyyyy) general risks faced
(zzzzzz) transactions with related parties, and
(aaaaaaa) losses on loans and advances
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effective date
134. this statement of financial accounting standard becomes effective for the
preparation and presentation of financial statements covering the reporting
period beginning on or after 1 january, 2000. early implementation is
encouraged.
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