PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2017 and for the Six-Month Periods Then Ended Expressed in thousands of Indonesian Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
j. Fixed assets continued
Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows:
Years
Buildings and infrastructures 2-40
Machinery and heavy equipment 10
Vehicle 5-10
Furniture and office equipment 2-5
Land is stated at cost and is not depreciated. Specific costs associated with the extension or renewal of land titles are deferred and amortized over the legal
term of the landrights or economic life of the land, whichever period is shorter. Construction in progress is stated at cost and is accounted as part of fixed assets. The accumulated costs are
reclassified to the appropriate fixed assets or investment properties account when the construction is completed and the constructed asset is ready for its intended use.
An item of fixed assets is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset calculated as the difference between the
net disposal proceeds and the carrying amount of the asset is credited or charged to operations in the year the asset is derecognized.
The fixed assets’ residual values, useful lives and methods of depreciation are reviewed and adjusted prospectively, if appropriate, at each financial year end.
k. Investment properties
Investment properties are stated at cost, which includes transaction cost, less accumulated depreciation and impairment loss, if any, except for land which is not depreciated. Such cost also includes the cost of replacing part
of the investment properties if the recognition criteria are met, and excludes the daily expenses on their usage. Investment properties consist of land, building and infrastructures, machinery and heavy equipment, hotel facilities
and furniture and office equipment held by the Group to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services or for administrative purposes or sale in the ordinary
course of business. Depreciation is computed using the straight-line method over the estimated useful lives of the investment
properties as follows:
Years
Buildings and infrastructures 3-40
Machinery and heavy equipment 10
Hotel facilities 2-5
Furniture and office equipment 2-5
Based on the Company’s management assessment and evaluation, began on January 1, 2015, the Company changes its useful lives of the building from 20 years to 40 years.
Transfers to investment properties should be made when, and only when, there is a change in use. evidenced by the end of owner-occupation, commencement of an operating lease to another party or end of construction or
development. Transfers from investment properties should be made when, and only when, there is a change in use, evidenced by the commencement of owner-occupation or commencement of development with a view to sell.
The changes in the useful lives estimation is done after considering the effect of the repairs and maintenance performed by the Company.
An investment property should be derecognized on disposal or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal. Gain or loss arising from the retirement or disposal of
investment property is credited or charged to operations in the year the asset is derecognized.
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2017 and for the Six-Month Periods Then Ended Expressed in thousands of Indonesian Rupiah, unless otherwise stated
21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED k. Investment properties continued
