PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 12 - Deferred tax assets and liabilities are offset in the consolidated balance sheet, except if these
are for different legal entities, in the same manner the current tax assets and liabilities are presented.
Amendments to tax obligations are recorded when an assessment is received or, if appealed against by the Company and its subsidiaries, when the result of the appeal is determined.
x. Earnings per Share
Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the year.
Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the year as adjusted for the effect of all dilutive potential
ordinary shares.
y. Derivative Instruments and Hedging Activities
Derivatives are recognized in the consolidated balance sheets at their fair value. Derivatives assets and liabilities are presented at the amount of unrealized gains or losses on derivatives
contracts, which the Company has designated upon acquisition as 1 trading instrument, 2 fair value hedge, 3 cash flow hedge and 4 hedge of a net investment in foreign operation.
The unrealized gains or losses are computed as the difference between the fair value and contract amount of the derivative instrument at the reporting date. Fair value is determined
based on market value, pricing models or quoted prices for instruments with similar characteristics.
Gain or losses on derivative contract is accounted for as follows: 1
Gain or losses on a derivative contract not designated as a hedging instrument or derivative contract that does not qualify as a hedging instrument is recognized
currently in earnings;
2 Gain or loss on derivative contract designated and qualifying as a fair value hedging
instrument as well as the offsetting gain or loss on the hedged assets or liabilities attributable to the hedged risk is recognized currently in earnings in the same
accounting period. Any difference that arises representing the effect of hedge ineffectiveness is recognized currently in earnings;
3 The effective portion of the gain or loss on a derivative contract designated and
qualifying as a cash flow hedging instrument is reported as a component of other comprehensive income under equity and reclassified into earnings in the same
accounting period or periods during which the hedged forecasted transaction affects earnings. The effect of the hedge ineffectiveness is recognized currently in earnings;
and;
4 Gain or loss on a hedging derivative instrument in a hedge of a net investment in a
foreign operation is reported in other comprehensive income as part of the cumulative translation adjustment under equity to the extent it is effective as a hedge.
z. Segment Information
