Accounting of Mutual Funds SFAS No.

49

CONTENTS

Paragraph

Characteristics of a Mutual Fund 01 - 03

Objective 04
Scope 05 - 07

Definitions

Mutual Fund transactions for the portfolio of securities 08 - 09

Valuation of the Portfolio of a Mutual Fund 10 - 13
Income and Expenses
Expenses related to the management of investments 14 - 17
Profit (Loss) of the Mutual Fund investments 18 - 21
Income from the distribution of rights by the company 22 - 24
Interest income 25 - 27

PRESENTATION OF THE FINANCIAL REPORTS

Financial Reports of a Mutual Fund 28

Report of Assets and Liabilities 29 - 30
Operating Report 31 - 32
Report on changes in net assets 33 - 34

DISCLOSURES 35

EFFECTIVE DATE 36

Attachments

The standard paragraphs, printed in bold letters must be read in the context of the
explanatory paragraphs and the implementation guidance in this statement. There is no
requirement to apply this statement on items considered to be immaterial.

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Accounting of Mutual Funds SFAS No. 49

PREFACE

Characteristics of a Mutual Funds

01. Funds accumulated by a mutual fund can be withdrawn at any time by the investor
through the sale of the unit of participation to the Mutual Fund.

02. The value of the net assets of a mutual fund represents the value of all units of
participation sold by the Mutual Fund to the investors. The value of the net assets
of an open-ended Mutual Fund should be available every day in the stock
exchange.

03. Bapepam (The Capital Investment Coordinating Body) as the body responsible for
the development and supervision of mutual funds requires specific financial
information which may not be available in the financial report presented based on
this statement.

Objective

04. The objective of this statement is to regulate the accounting of an open-ended

mutual fund.

Scope

05. This statement regulates the accounting treatment of specific transactions related
to a mutual fund. Matters not dealt with in this statement shall be treated by
referring to the generally accepted accounting principles.

06. This statement is applicable to any financial report of a mutual fund presented to
external parties.

07. This statement does not regulate the accounting treatment for an investor of his
participation in a mutual fund.

Definitions

Mutual fund is an institution used to accumulate funds from the investors which will be
subsequently invested in a portfolio of securities by the investment manager.

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Open-ended mutual fund is a mutual fund that can offer and repurchase its shares from
the investors up to the amount of capital issued.

Custodian is the party providing the services of custodianship of securities and other
assets related to securities and other services including the collection of dividends, interest
and other rights, executes transaction and represents the account holders who are his
clients.

Securities are valuable papers such as promissory notes, commercial valuable papers,
stocks, bonds, debt acknowledgment and participation unit in a collective investment
contract. Included under securities are future contracts and other derivatives of a
security.

Mutual fund transaction for the portfolio of securities

08. The transaction for the portfolio of securities shall be recognized in the
financial statements of a mutual fund at the time a commitment is made on
the security transaction.

09. The date of a transaction commitment and the date of a transaction settlement
differs for a security transaction in a regular market. The risk, benefit and
economic potential arise on the transaction commitment date, although the security
has not been delivered yet. The financial statements of the mutual fund must
present the receivable from the security company from the sale of the security and
the liability to the security company for the purchase of the security on the trade
date.

Valuation of the Portfolio of a Mutual Fund

10. The portfolio of securities shall be valued based on the market price.
Unrealized profit or loss resulting from an increase or decrease in the market
price shall be reported in the operating report and the changes in net assets
report during the current period.

11. Securities traded in the stock exchange have a high level of liquidity and a fairly
fast price fluctuation. Therefore, valuation based on market price more reflects the
reliable value. The market price is available at the stock exchange and is published
daily. In the event a security is listed in more than one stock exchanges, the
market price to be used is the latest price at the main stock exchange, where the
security is traded.

12. For a security in a portfolio of a mutual fund, which is not liquid or for which
a reliable market price is not available, the valuation shall be based on the
fair value.

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13. Although a security is listed on the stock exchange, it may happen that the market
price of that security is not available or is not reliable, because the security is not
actively traded. In such event, the fair value of that security must be determined.

Income and Expenses

Expenses related to the management of Investments

14. Expenses related to the management of investments shall be recognized on an

accrual and daily basis.

15. In line with its characteristics, a mutual fund shall publish a report on the value of
net assets daily. Therefore, expenses shall be calculated on a daily basis.

16. Expenses related to the activities of a mutual fund include among other :

a. expenses for the management of investments as compensation for the services

of the investment manager.
b. transaction expenses consisting of broker services expenses, stock exchange
expenses related to transactions performed for the portfolio of the
securities.
c. custodian expenses as a compensation for the services rendered by the
custodian, and
d. expenses for the prospectus publication.

Profit (loss) of the Mutual fund investments

18. Realized and unrealized profit (loss) from investments shall be recognized in
the current period profit and loss statement.

19. In managing the funds of a mutual fund, the investment manager invests the funds
in a portfolio of securities. The profit or loss on investments originates either from
the sale of the securities or from the increases (decreases) of the fair value of the
securities. For purposes of the mutual fund reporting, the profits or losses are
divided into two classifications, namely :

a. Realized profit (loss), and

b. Unrealized profit (loss)

20. The profit (loss) from the sale of a security represents a realized profit (loss),
whilst that resulting from an increase (decrease) of the fair value of the security
constitutes an unrealized profit (loss). Interest receivable from a debt security is
an unrealized profit.

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21. In calculating the profit (loss) from the sale of a security the average method of
cost of sales valuation adopted by the mutual fund industry shall be used.

Income from the distribution of rights by the company

22. Income from the distribution of rights by the company shall be recognized on
the ex-date.

23. Dividends, bonus shares and other rights distributed by the company will be
obtained from the investment activities in shares of the portfolio of securities. For
shares listed in the stock exchange, there are several stages in the distribution of
rights, namely :

a. date of the declaration of dividends by the company;

b. cum-date, namely the date indicating that all outstanding shares of the
company have a right on dividend, or bonus share or other right to be
distributed.
c. ex-date, namely the date when the company shares no longer have a right on
dividend, bonus share or other right.

24. On the ex-date, the market price of a listed share tend to decrease as the share no
longer has a claim on the right declared by the company. Therefore, the
distribution of the right is not recorded on the cum-date.

Interest Income

25. Interest income from a debt security shall be recognized on an accrual basis
and shall be reported as unrealized income.

26. A purchase discount from the principal of a debt security shall be recognized
as an interest receivable and shall be amortized as interest income over the
life of the debt security.

27. If a bond is purchased at a price separate from the current interest, the
interest paid shall be recognized as an interest receivable.

PRESENTATION OF THE FINANCIAL REPORTS

Financial Reports of a Mutual Fund

28. The financial reports of a Mutual Fund consist of :

a. Report of Assets and Liabilities;

b. Operating Report;
c. Report on changes in net assets, and

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d. Notes to the Financial Reports.

Report of Assets and Liabilities

29. The objective of the Report of Assets and Liabilities is to present

information on the assets, liabilities and net assets of a mutual fund and the
inter-relationship between these components at a certain date.

30. The report of Assets and Liabilities shall be presented using the unclassified
method, so that assets and liabilities are not grouped into the current and
non-current components. In the assets section, the portfolio of securities
account shall be presented in the first order, while the other accounts shall be
presented in the order of liquidity. Liabilities accounts shall be reported in
the order of maturity dates.

Operating Reports

31. The objective of the operating report is to present changes in net assets
resulting from all investment activities of the mutual fund, through the
reporting of investment income in the form of dividends, interests and other
income less expenses, realized (unrealized) profit (loss) from securities
transactions and unrealized changes in the fair value of a security in the
portfolio of securities during a period. Such presentation will assist the user
of the report to understand the contribution of each aspect of the investment
activities to the whole operations of the mutual fund.

32. The operating report shall be presented in a multiple-step form by

segregating income and expenses from profit (loss) originating from the
increase or decrease of the fair value of the portfolio of securities (either
realized or unrealized).
Report on changes in net assets

33. The objective of the report on changes in net assets is to present a brief
information on the changes in net assets from operations and the changes in
net assets originating from transactions with the shareholders or holders of
participation units.

34. The report on changes in net assets shall be presented by segregating changes in
net assets originating from operations and changes in net assets originating from
transactions with the shareholders or holders of participation units.

DISCLOSURES

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35. The following information must be disclosed in the notes to the financial
reports :

a. A summary of purchases and sales of securities during the period of

reporting containing the following information on each security.

1. Equity

(i) name of the security

(ii) total amount of purchase/sale price
(iii) the number of securities

2. Debt securities

(i) name of the security

(ii) total amount of purchase/sale price
(iii) number of securities
(iv) par value
(v) maturity date
(vi) interest rate
(vii) the ranking of the securities

b. Broker commission expenses during the period of reporting

c. total participation units owned by investors and by the investment

manager

d. details of the portfolio of securities containing the following information

for each security :

1. Name of the security

2. Fair value
3. number of securities
4. par values for debt securities
5. maturity dates
6. interest rate
7. the percentage of the fair value of a security to the fair value of the
portfolio of securities.

EFFECTIVE DATE

This statement becomes effective for the preparation and presentation of financial
reports covering the period beginning with or after 1 January, 1999. Early
implementation is encouraged.

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Illustration 1

Illustration 1

INDONESIA MUTUAL FUND

REPORT OF ASSETS AND LIABILITIES

31 December 19x1 and 19x0

(In millions of Rupiahs, except the value of
net assets per participation unit)

Notes 19x1 19x0

ASSET

Portfolio of securities (Acquisition

cost Rp xxx in year 19x1 and

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Rp xxx in year 19x0) xxx xxx

Cash xxx xxx
Accounts Receivable
Security Transaction Receivable xxx xxx
Interests and Dividends xxx xxx
Other xxx xxx
Other Assets xxx xxx
TOTAL ASSETS xxx xxx
=== ===

LIABILITIES
Accounts Payable xxx xxx
Security Transaction Payable xxx xxx
Other xxx xxx
TOTAL LIABILITIES xxx xxx
=== ===

NET ASSETS xxx xxx

Total number of participation

units outstanding xxx xxx

Net asset value per participation unit xxx xxx

Illustration 2

INDONESIA MUTUAL FUND

OPERATING REPORT
FOR THE YEAR ENDED DECEMBER 31
(In millions of Rupiahs)

Notes 19x1 19x0

INVESTMENT INCOME
Interests xxx xxx
Dividends xxx xxx
Other xxx xxx
Total Investment income xxx xxx
=== ===

INVESTMENT EXPENSES
Investment Management xxx xxx
Custodian xxx xxx
Other xxx xxx

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Accounting of Mutual Funds SFAS No. 49

Total Investment Expenses xxx xxx

=== ===

PROFIT (LOSS) FROM INVESTMENTS

(REALIZED AND UNREALIZED)
Realized profit from investment xxx xxx
Unrealized profit from investment xxx xxx

TOTAL NET INVESTMENT PROFIT xxx xxx

INCREASE IN NET ASSETS FROM

OPERATING ACTIVITIES xxx xxx
=== ===

Illustration 3

INDONESIA MUTUAL FUND

REPORT ON CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31
(In millions of Rupiahs)

Notes 19x1 19x0

INCREASE IN NET ASSETS

FROM OPERATING ACTIVITIES
Investment Income - Net xxx xxx
Realized Investment Profit xxx xxx
Unrealized Investment Profit xxx xxx

Total Increase in net assets

from operating activities xxx xxx

TRANSACTION WITH HOLDERS

OF PARTICIPATION UNITS
Sale of participation units xxx xxx
Reacquisition of participation units xxx xxx
Distribution to holders of participation units xxx xxx

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Total transactions with holders of

participation units xxx xxx

TOTAL INCREASE IN NET ASSETS xxx xxx

NET ASSETS AT THE BEGINNING OF

THE YEAR xxx xxx

NET ASSETS AT THE END OF THE YEAR xxx xxx

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