PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 40 - If the ownership interest in an associate is reduced but significant influence is retained, only
a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.
The Group’s share of its associates’ post-acquisition profits or losses is recognized in consolidated statement of comprehensive income, and its share of post acquisition
movements in other comprehensive income is recognized in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred
obligations or made payments on behalf of the associate. The Group determines at each reporting date whether there is any objective evidence that
the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognises the amount adjacent to “share of profitloss of an associate” in the profit or loss. Unrealized gains on transactions between the Group and its
associates are eliminated to the extent of its interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Adjustments are made where necessary to conform the associate’s accounting policies with the policies adopted by the Group.
Profits or losses resulting from upstream and downstream transactions between the Group and its associates are recognized in the Group’s consolidated financial statements only to
the extent of unrelated investor’s interests in the associates. Dilution gains or losses arising from investments in associates are recognized in the
consolidated statement of comprehensive income.
q. Investment Properties
Investment properties are measured at cost, except land, including transaction costs, less accumulated depreciation and any impairment loss. The carrying amount includes the cost
of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing of an investment
property. Investment properties are derecognized when either they have been disposed of or when
the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an
investment property are recognized in the consolidated statement of comprehensive income in the year of retirement or disposal.
Investment properties, depreciated over its estimated useful life using the straight-line method at 5 per annum.
Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another
party or ending of construction or development. Transfers are made from investment properties when, and only when, there is a change in use, evidenced by commencement of
owner-occupation or commencement of development with a view to sale.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 41 -
r. Property and
Equipment
The Group adopted PSAK No.16 2008, Property and Equipment. The Group elected to use the cost method for property and equipment measurement.
Property and equipment, except land, buildings and buildings improvements, are carried at cost, excluding day to day servicing, less accumulated depreciation and any impairment in
value. Land is not depreciated and is stated at cost less any impairment in value. The initial cost of property and equipment consists of its purchase price, including import
duties and taxes and any directly attributable costs in bringing the property and equipment to its working condition and location for its intended use.
Expenditures incurred after the property and equipment have been put into operations, such as repairs and maintenance costs, are normally charged to operations in the year such
costs are incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in an increase in the future economic benefits expected to be obtained from
the use of the property and equipment beyond its originally assessed standard of performance, the expenditures are capitalized as additional costs of property and
equipment. Initial legal costs incurred to obtain legal rights are recognized as part of the acquisition cost
of the land, and these costs are not depreciated. Costs related to renewal of land rights are recognized as intangible assets and amortized during the period of the land rights.
All property and equipment, except for land and buildings, are depreciated over their estimated useful lives using the double-declining-balance method. Buildings are depreciated
over their estimated useful lives using the straight-line method. The depreciation rates are as follows:
Rate Buidings:
• Permanent • Non-permanent
5 10
Property and equipment other than buildings: Class I
: Assets with useful lives of less than 4 years 50
Class II : Assets with useful lives of between 4 to 8 years
25 The carrying values of property and equipment are reviewed for impairment when events or
changes in circumstances indicate that the carrying values may not be recoverable. When each major inspection is performed, its cost is recognized in the carrying amount of
the item of property and equipment as a replacement if the recognition criteria are satisfied. Such major inspection is capitalized and amortized over the next major inspection activity.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 42 - An item of property and equipment is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. When assets are sold or retired, the cost and related accumulated depreciation and amortization and any impairment loss
are eliminated from the accounts. Any gains or loss arising from de-recognition of property and equipment calculated as the difference between the net disposal proceeds, if any, and
the carrying amount of the item is included in the consolidated statement of comprehensive income in the year the item is derecognized.
The asset’s residual values, if any, useful lives and depreciation method are reviewed and adjusted if appropriate, at each financial year end.
Construction in Progress Construction in progress represents property and equipment under construction which is
stated at cost and is not depreciated. The accumulated costs will be reclassified to the respective property and equipment account and will be depreciated when the construction is
substantially complete and the asset is ready for its intended use.
s. Foreclosed Properties
Foreclosed properties are stated at the lower of carrying amount and fair value less costs to sell. The difference between between the value of the foreclosed properties
and the outstanding loan principal, if any, is charged to the current year consolidated statement of comprehensive income. The difference between the carrying value of the
foreclosed property and the proceeds from its sale is recognized as a gain or loss in the period the property was sold.
The costs of maintenance of foreclosed properties are charged to consolidated statement of comprehensive income when incurred.
The carrying amount of the property is written-down to recognize a permanent dimunition in value of the foreclosed property, which is charged to the current year consolidated
statement of comprehensive income. Management evaluates regulary the carrying value of foreclosed property. The carrying
amount of the property is written-down to recognize a permanent dimunition in value of the foreclosed property, which is charged to the current year consolidated statement of
comprehensive income.
t. Prepaid Expenses
Prepaid expenses are amortized over their beneficial or contract periods using the straight- line method.
u. Impairment of Non-Financial Assets
The Group assesses at each annual reporting period whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for
an asset is required, the Group makes an estimate of the asset’s recoverable amount.
