PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 511
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
d. Foreign currency translation continued
ii. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
As at the consolidated statement of financial position dates, the exchange rates used, based on the middle rates published by Bank Indonesia, were as follows full US Dollar amount:
31 December 2014 31 December 2013
Rupiah 10,000 “Rp” 0.80
0.82 Pound Sterling “£”
1.56 1.65
Singapore Dollars “S” 0.76
0.79 Australian Dollars “A”
0.82 0.89
Euro “€” 1.22
1.38 Yen 100 “¥”
0.84 0.95
iii. Group companies
The results of the operations and financial position of all the Group’s subsidiaries none of which has the currency of a hyperinflationary economy that have a functional currency which is different from the Company’s
presentation currency are translated into the Company’s presentation currency as follows: a The assets and liabilities presented in the consolidated statement of financial position are translated at the
closing rate at the date of that consolidated statement of financial position; b The income and expenses for each profit or loss are translated at average exchange rates unless this average
is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case the income and expenses are translated at the rate on the dates of the transactions; and
c All of the resulting exchange differences are recognised in other comprehensive income.
e. Cash and cash equivalents
Cash and cash equivalents are cash on hand, cash in banks and time deposits with maturity periods of three months or less at the time of placement that are not used as collateral or are not restricted.
The consolidated statements of cash flows have been prepared using the direct method by classifying the cash flows on the basis of operating, investing and financing activities.
f. Receivables
Trade receivables are amounts due from customers for coal and electricity sold or services performed in the ordinary course of business. Non-trade receivables are amount arising from transactions outside of the ordinary course of
business. If collection of the receivables is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
Receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, if the impact of discounting is significant, less provision for impairment.
Non-trade receivables to related parties are initially presented as non-current asset unless there are specific reasons for them to be presented as current assets in the consolidated statements of financial position.
163
AdARo ENERgy 2014 ANNuAl REPoRT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 512
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2014 AND 2013
Expressed in thousands of US Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
g.
Inventories
Coal inventories are stated at the lower of cost or net realisable value. Cost is determined based on the weighted average method which includes mining costs, direct labor costs, other direct costs and an appropriate portion of fixed
and variable overheads related to mining operations. It excludes borrowing costs. The net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale.
Spare parts, fuel, lubricants, tools and supplies are valued at cost less a provision for obsolete and slow moving inventory. Cost is determined based on the weighted average method. A provision for obsolete and slow moving
inventory is determined on the basis of estimated future usage or sale of individual inventory items. Supplies of maintenance materials are charged to production costs in the period in which they are used.
h. Financial assets
