PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED l. Leases
continued
form of the contract, at inception date. Finance lease
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an asset.
Operating lease A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to
ownership of the leased asset. Accordingly, the lease payments received by the Group as lessors are recognized as income using the straight-line method over the lease term.
m. Capitalization of borrowing costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the related asset. Other borrowing costs are recognized as expenses in the period in
which they are incurred. Borrowing costs may include interest, finance charges in respect of finance leases recognized in accordance with PSAK No. 30 Revised 2011 and foreign exchange differences arising from foreign currency
borrowings to the extent that they are regarded as adjustment to interest costs. Capitalization of borrowing costs commences when the activities to prepare the qualifying asset for its intended use
have started and the expenditures for the qualifying asset and the borrowing costs have been incurred. Capitalization of borrowing costs ceases when all the activities necessary to prepare the qualifying asset for its
intended use are substantially completed.
n. Impairment of non-financial asset value
The Group assesses at each reporting date whether there is an indication that assets may be impaired. If any such indication exists, or when annual impairment testing for assets i.e., an intangible asset with an indefinite useful life, or
an intangible asset not yet available for use is required, the Group makes an estimate of the recoverable amounts of the respective assets.
An asset’s recoverable amount is the higher of the asset’s or its CGU’s fair value less costs to sell and its value in use, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing the value in use, the
estimated net future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs
to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used to determine the fair value of the asset. These calculations are corroborated by
valuation multiples or other available fair value indicators. Impairment losses of continuing operations, if any, are recognized in the consolidated statement of profit or loss and
other comprehensive income under expense categories that are consistent with the functions of the impaired assets.
o. Stock issuance costs
Costs incurred in connection with the issuance of capital stock are presented as a deduction to additional paid-in- capital..
p. Revenue and expense recognition
Revenues from real estate sales are recognized as follows i Revenue from sales of houses, shops and other similar property and related land are recognized under the full
accrual method if all of the following conditions are met:
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED p.
Revenue and expense recognize continued
1. A sale is consummated. 2. The selling price is collectible.
3. The seller’s receivable is not subject to future subordination to other loans which will be obtained by the buyer.
4. The seller has transferred to the buyer the usual risks and rewards of ownership in a transaction that is in substance a sale and does not have a substantial continuing involvement with the property.
ii Revenues from sales of landplots that do not require the seller to construct the building are recognized under the full accrual method if all of the following conditions are met:
1. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable. 2. The selling price is collectible.
3. The receivable is not subordinated to other loans that will be obtained by the buyer. 4. The land development process is complete so that the seller has no further obligations related to the
landplots sold. 5. Only the landplots are sold. Without any requirement for the seller’s involvement in the construction of the
building on the landplots. iii Revenues from sales of apartments, the construction of which has not been completed, are recognized using the
percentage-of-completion method if all of the following conditions are met: 1. The construction process has already commenced, i.e., the building foundation has been completed and all
of the requirements to commence construction have been fulffiled 2. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable.
3. The amount of revenue and the cost of the property can be reliably estimated. If any of the above conditions is not met, the payments received from the buyer are recorded as deposits received
until all of the criteria are met. The method used to determine the percentage of completion is the proportion of actual costs incurred to the
estimated total development cost of the real estate project. Rental and membership fees in sports club are recognized as income over the period of rental or membership. Rental
and membership fees received in advance are presented as “Unearned Revenues”. Revenues from restaurant operations are recognized when the goods are delivered or when the services have been rendered.
Revenue from hotel room occupancy is recognized on the basis of the period of occupancy. Revenue from other hotel services is recognized when the services are rendered or the goods are delivered to the customer.
The elements of costs which are capitalized to real estate development projects include the pre-acquisition cost of land, cost of land acquisition and other costs attributable to the development activity of real estate. The costs are
allocated to real estate development projects using either the saleable area method or the sales value method. Costs which are not clearly related to a real estate project, such as general and administrative expenses, are
recognized as an expense as they are incurred. If a certain project is estimated to generate a loss, a provision must be recognized for the amount of the loss.
The revision of estimated costs or revenues, if any, which are generally attributed to real estate development
activities must be allocated to ongoing and future projects. Revisions resulting from current period and prior period adjustments are recognized in the current period profit and loss, while revisions related to future periods are allocated
to the remaining period of development.
q. Employee benefits
Effective January 1, 2015, the Group has applied, retrospectively, PSAK No. 24 Revised 2013, “Employee Benefits” to replace PSAK No. 24 Revised 2010, “Employee Benefits”. This PSAK provides, among others, i the elimination
of the “corridor approach” permitted under the previous version and ii significant changes in the recognition, presentation and disclosure of post-employment benefits which, among others, are as follows:
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED q. Employee benefit continued
Actuarial gains and losses are now required to be recognized in other comprehensive income OCI and excluded permanently from profit or loss.
Expected return on plan assets will no longer be recognized in profit or loss. Expected returns are replaced by recognizing interest income or expense on the net defined benefit asset or liability in profit or loss, which is
calculated using the discount rate used to measure the pension obligation.
Unvested past service costs can no longer be deferred and recognized over the future vesting period. Instead, all past service costs will be recognized at the earlier of when the amendmentcurtailment occurs or when the Group
recognizes related restructuring or termination costs. Such changes are made in order that the net pension assets or liabilities are recognized in the consolidated
statement of financial position to reflect the full value of the plan deficit or surplus. Post-employment benefits
The Group recognized an unfunded employee benefits liability in accordance with Labor Law No.132003 dated March 25, 2003 the “Law” and PSAK No. 24 2013, “Employee Benefits”. Under the Law, the Group is required to
pay separation, appreciation and compensation benefits to its employees if the conditions specified in the Law are met.
Post-employment benefits continued The Group also has a defined contribution plan covering substantially all of its eliglible employees. The benefits under
the Law have been calculated by comparing the benefits that will be received by an employee at normal pension age from the Pension Plan with the benefits as stipulated under the Law, after deducting the accumulated employee
contribution and the related investment results. If the employer-funded portion of the Pension Plan benefit is less than the benefit as required by the Law, the Group will provide for such shortfall.
Pension costs under the Group’s defined benefit pension plans are determined by periodic actuarial calculation using the projected-unit-credit method and applying the assumptions on discount rate, expected return on plan assets and
annual rate of increase in compensation. All re-measurements, comprising of actuarial gains and losses, and the return of plan assets excluding net interest
are recognized immediately through other comprehensive income in order for the net pension asset or liability recognized in the interim consolidated statement of financial position to reflect the full value of the plan deficit and
surplus. Re-measurements are not reclassified to profit or loss in subsequent periods. All past service costs are recognized at the earlier of when the amendmentcurtailment occurs and when the related
restructuring or termination costs are recognized. As a result, unvested past service costs can no longer be deferred and recognized over the future vesting period.
The interest cost and expected return on plan assets used in the previous version of PSAK No. 24 are replaced with a net-interest amount, which is calculated by applying the discount rate to the net defined benefit liability or asset at
the start of each annual reporting period.
r. Foreign currency transactions and balances
Transactions involving foreign currencies are recorded at the rates of exchange prevailing at the time the transactions are made. At the end of the reporting period, monetary assets and liabilities denominated in foreign currencies are
adjusted to reflect the average of the selling and buying rates of exchange prevailing at the last banking transaction date of the year, as published by Bank Indonesia, and the resulting gains or losses are credited or charged to current
operations. As of June 30, 2016 and December 31, 2015, the rates of exchange used were as follows:
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED r. Foreign currency transactions and balances continued
s.
Foreign Currencies June 30, 2016
Full Amount December 31, 2015
Full Amount
1 European Euro Euro 14,651
15,070 1 United States Dollar US
13,180 13,795
1 Singapura Dollar Sin 9,771
9,751 Transactions in other foreign currencies are considered not significant.
Provisions A provision is recognized when the Group has a present obligation legal or constructive where, as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
All of the provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the
obligations, the provisions are reversed.
t. Income tax
