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Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk
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Laporan Tahunan 2012 • Annual Report 2012 • PT. ERATEX DJAJA Tbk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
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i. Inventories
Inventories are stated at cost or net realizable value, whichever is lower. Cost is based on the average method and comprises all costs of purchase, costs of conversion and other costs incurred in
bringing the inventory to its present location and condition. Finished goods and goods in process are including fixed and variable factory overhead in addition to direct materials and labor.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
Inventory allowance are determined by the calculation of inventory value by the end of the accounting period.
j. Lease
Effective on January 1, 2012, the Entity retrospectively implemented PSAK No. 30 Revised 2011, “Leases”. The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception
date and whether the fulfillment of the arrangement is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. Leases that transfer substantially to the lessee all the risks and rewards incidental to
ownership of the leased item are classified as finance leases. Moreover, leases which do not transfer substantially all the risks and rewards incidental to ownership of the leased item are classified as operating leases.
k. Fixed Assets
Effective on January 1, 2012, the Entity and Subsidiaries adopted PSAK No. 16 Revised 2011, “Fixed Assets”. The revised PSAK No. 16 also prescribes accounting for land and therefore, it also revoked PSAK No. 47, “Accounting the Land”. ISAK No.
25 which was effective on the same date, provides further guidance related to the treatments of certain landrights in Indonesia and the related costs.
Fixed assets are stated at cost less accumulated depreciation and impairment losses. Such costs include the cost of replacing part of the fixed assets when that cost is incurred, if the recognition criteria are met. Likewise, when a major
inspection is performed, its cost is recognized in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs that do not meet the recognition criteria are recognized in profit
or loss as incurred.
Depreciation is computed using the straight-line method based on their estimated useful lives of the assets except land as follows:
Buildings and structures 25 years
Machinery and equipment 15 years
Vehicles 10 years
Furniture and fixtures 10 years
When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written down to its estimated recoverable amount, which is determined as the higher of net selling price or value in use.
Fixed assets which are not in used, will be classified as asset held for sale. Construction in progress is stated at cost and transferred to the respective fixed assets account when completed and ready
for use.
l. Impairment of non-financial assets
At each statements of financial position date, the Entity and its Subsidiaries review whether there is any indication of asset impairment or not.
Fixed assets and other assets, including intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount
by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an assets net selling price and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows.
m. Intangible Assets
