PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
Marketable securities are initially measured at fair value plus directly attributable transaction costs. For securities measured at fair value through profit and loss, the transaction costs are
directly charged to profitloss.
Investment in Sukuk 1.
Investment in sukuk measured at cost
Investment in sukuk is initially measured at cost, including transaction costs. The difference between the acquisition cost and the nominal value is amortized on a
straight-line basis over the term of the sukuk.
If indication of impairment exists then the amount of impairment loss is measured as the difference between the recoverable amount of sukuk and its carrying value.
2.
Investment in sukuk measured at fair value
Investment in sukuk is measured at cost, excluding transaction costs. After initial recognition, the difference between the fair value and the carrying amount is
recognized in the consolidated statement of comprehensive income.
j. Consumer Financing Receivables
Consumer financing is financing activity for procurement of goods based on the needs of consumer with payment by installments.
Consumer financing receivables are categorized as loans and receivable and are stated at amortized cost less allowance for doubtful accounts see Note 2h. Interest income is
recognized based on the effective interest rate method.
In relation to joint consumer financing transactions and channeling of consumer financing receivables with other parties, the Group’s responsibility is to collect and administer the
transferred consumer financing receivables. The difference between the interest charged to the customers by the Group and the interest charged by the investors is recognized as
income by the Group and directly credited to the “Consumer financing income” account in the consolidated statements of comprehensive income.
In joint financing and credit channeling transactions on a with recourse basis, the Group recognizes assets or liabilities in its books. In joint financing and credit channeling
transactions on a without recourse basis, the assets are presented at net amounts in the consolidated statements of financial position.
Receivables are deemed uncollectible if the debtors are unable to pay and, and have been delinquent for more than 90 to 120 days.
The Group repossesses the collateral – vehicle if the consumers had not made payments despite issuance of two collection letters. When the collateral - vehicle has been
repossessed from the consumers, the consumer financing receivables are written off.
The repossessed vehicle is stated at the lower of the carrying value of consumer finance receivables or net realizable values. Any difference between the carrying amount and net
realizable value is recorded as the allowance for impairment loss and normally charged to operations in the year such costs are incurred. In the settlement of receivables, the
consumer authorizes the Group to sell the vehicle or perform other actions in case of breach of the financing agreement. If the selling price of the vehicle is lower than the collateral
value of financing receivables, the difference is charged to the consolidated statement of comprehensive income.
- 30 -
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
k. Lease Transactions
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement at inception date of whether the fulfillment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
A reassessment is made after inception of the lease only if one of the following applies: 1. there is a change in contractual terms, other than a renewal or extension of the
agreement; 2. a renewal option is exercised or extension granted, unless the term of the renewal or
extension was initially included in the lease term; 3. there is a change in the determination of whether the fulfillment is dependent on a
specified asset; or 4. there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave rise to the reassessment for scenarios 1, 3 or 4
and the date of renewal or extension period for scenario 2. 1.
Accounting Treatment as a Lessee Finance Lease
Leases which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease at the fair
value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest in the remaining balance of the liability. Finance charges are charged directly against
consolidated statement of comprehensive income. Capitalized leased assets are depreciated over the estimated useful life of the assets
except if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, in which case the lease assets are depreciated over the shorter
of the estimated useful life of the assets and the lease term. Operating Lease
Operating lease payments are recognized as an expense in the consolidated statements of comprehensive income on a straight-line basis over the lease term.
2. Accounting Treatment as a Lessor
Finance Lease Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of the ownership to the lessee. Amount due from lessees under finance leases are recorded at the amount of the Group’s net
investments in finance lease.
- 31 -
