PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,2005 AND 2004 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
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n. Other Deferred Charges
Syndicated Loan Deferred charges relating to the syndicated loan obtained are amortized using the straight-
line method over the terms of the agreement.
Land rights
Deferred charges relating to legal processing of land rights are amortized using the straight- line method over the legal term of the land rights, since the legal term of the land right is
shorter than its economic life. The amortization begins when the legal processing of land rights is substantially complete.
o. Bonds Issuance Costs
Bonds issuance cost are deducted directly from the proceeds of the related bonds to determine the net proceeds of the bonds. Differences between the net proceeds and nominal
values represent discounts or premiums which are amortized using the straight-line method over the term of the bonds.
p. Stock Issuance Costs
Stock issuance cost are presented as a deduction from the “ Additional paid – in capital “ account and are not amortized.
q. Impairment of Assets
In accordance with PSAK no. 48, “ Impairment of Assets Value,” an assessment of the assets value is made at each balance sheet date to determine whether there is any indication of
impairment of any assets and possible written – down to fair value whenever events or
changes in circumstances indicate that the asset value may not be recoverable. An asset‟s recoverable amount is computed as the higher of the asset‟s value in use or its net
selling price. An impairment loss is recognized only if the carrying amount of an asset exceeds the
recoverable amount. On the other hand, a reversal of an impairment loss is recognized whenever there is indication that the asset is not impaired anymore.
The amount of impairment loss reversal of impairment loss is recognized in the current
year‟s operation.
r. Revenue and Expense Recognition
