PT SUMMARECON AGUNG Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2013 AND DECEMBER 31, 2012, 2011 AND 2010 AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012 UNAUDITED
AND YEARS ENDED DECEMBER 31, 2012, 2011 AND 2010 Expressed in thousands of rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued a. Basis of preparation of the consolidated financial statements continued
The consolidated financial statements have been prepared on the accrual basis using the historical cost concept of accounting, except for certain accounts which are measured on the basis
described in the related accounting policies for those accounts. The consolidated statements of cash flows present cash flows classified into operating, investing
and financing activities. The cash flows from operating activities are presented using the direct method.
The reporting currency used in the preparation of consolidated financial statements is the Indonesian rupiah Rp, which is also the functional currency of the Company and Subsidaries.
These financial statements were prepared solely for inclusion in the prospectus in connection with the proposed bonds offering of PT Summarecon Agung Tbk on the Indonesia Stock Exchange.
b. Principles of consolidation
The consolidated financial statements include the accounts of the Company and Subsidiaries mentioned in Note 1d, in which the Company maintains more than 50 share ownership, either
directly or indirectly. All material intercompany accounts and transactions including unrealized gains or losses are
eliminated. A subsidiary is fully consolidated from the date of acquisition, being the date on which the
Company obtains control, and continues to be consolidated until the date such control ceases. Control is presumed to exist if the Company owns, directly or indirectly through another Subsidiary,
more than half of the voting power of an entity. Control also exists when the Company owns half or less of the voting power of an entity when there is:
a power over more than half of the voting rights by virtue of an agreement with other investors; b power to govern the financial and operating policies of the entity under a statute or an
agreement; c power to appoint or remove the majority of the members of the board of directors or equivalent
governing body and control of the entity is by that board or body; or d power to cast the majority of votes at meetings of the board of directors or equivalent
governing body and control of the entity is by that board or body. Losses of a non-wholly owned subsidiary are attributed to the non-controlling interests NCI even
if such losses result in a deficit balance. In case of loss of control over a subsidiary, the Company:
- derecognizes the assets including goodwill and liabilities of the subsidiary;
- derecognizes the carrying amount of any NCI;
- derecognizes the cumulative translation differences, recorded in equity, if any;
- recognizes the fair value of the consideration received;
- recognizes the fair value of any investment retained;
- recognizes any surplus or deficit in profit or loss; and
- reclassifies its share of components previously recognized in other comprehensive income to
profit or loss or retained earnings, as appropriate.
