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PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 516
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
Ì
S Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
j. Fixed assets and depreciation continued
For assets which are no longer utilised or sold or surrendered to the Government, the carrying amounts are eliminated from the consolidated financial statements and the resulting gains or losses on disposals of fixed assets
are recognised in profit or loss.
The accumulated costs of the construction of buildings and plants and the installation of machinery are capitalised as construction in progress. These costs are reclassified to the fixed asset accounts when the construction or
installation is completed and is ready for use in the manner intended by management. Depreciation is charged from that date.
k. Goodwill
Goodwill represents the excess of the acquisition cost over the fair value of the Group’s share of the identifiable net assets acquired.
l. Impairment of non-financial assets
Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready to use - are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest level for
which there are separately identifiable cash flows cash generating units. Non-financial assets other than goodwill that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.
Reversal on impairment loss for assets other than goodwill would be recognised if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment test was
carried out. Reversal on impairment losses will be immediately recognised in profit or loss. The reversal will not result in the carrying amount of an asset that exceeds what the depreciated cost would have been had the
impairment not been recognised at the date at which the impairment was reversed. Impairment losses relating to goodwill would not be reversed.
m. Exploration and evaluation assets
