PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
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n. Loans
Loans represent provision of cash or cash equivalent based on agreements with borrowers, where borrowers required to repay their debts with interest after specified periods.
Loans are classified as loans and receivables refer to Note 2i Loans are initially measured at fair value plus transaction costs that are directly attributable
and additional costs to acquire the asset, and after initial recognition are measured at amortized cost using the effective interest method less any allowance for impairment losses.
Included in loans are Islamic financing murabaha receivables. Murabaha is a contract of sale of goods with a selling price at cost plus profit margin as agreed and the seller must
disclose the cost of the goods to the buyer. Loan restructuring may involve a modification of the terms of the loans, conversion of loans
into equity or other financial instruments andor a combination of both. Restructured loans are stated at the lower of carrying value of the loan at the time of
restructuring or net present value of the total future cash receipts after restructuring. Losses arising from any excess of the carrying value of the loan at the time of restructuring over the
net present value of the total future cash receipts after restructuring are recognised as profitloss. Thereafter, all cash receipts under the new terms shall be accounted for as the
recovery of principal and interest revenue, in accordance with the restructuring scheme.
o. Ijarah Assets
Ijarah Assets are recognized at cost refer to PSAK No. 16: Fixed Assets and PSAK No. 19: Intangible Assets.
Ijarah assets, such as motorcycle, machinery, heavy equipment and software are depreciated or amortized over the lease term or the economic lives of assets, whichever is
shorter, where at the end of the year, these assets are assigned to customer. For the Ijarah muntahiyah bitamlik contracts lease financing, if at the time of transfer of
ownership of the Asset from the owner to the ijarah tenant by grant, then the carrying amount is recognized as an ijarah asset expense.
Lease income during lease term is recognized when the benefits of assets have been handed over to the lessee.
Ijarah income is presented net of related expenses such as, depreciation, maintenance and repairs expenses. Ijarah net income is presented as part of interest revenues and profit
sharing - loans in the consolidated statements of comprehensive income.
p. Investments in
Associates
Investments in associates are accounted for using the equity method of accounting and are initally recognized at cost. Associates are all entities over which the Group has significant
influence but not control, generally accompanying a shareholding of between 20 to 50 of the voting rights. These investments include goodwill identified on acquisition, net of any
impairment loss.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
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a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.
The Group’s share of its associates’ post-acquisition profits or losses is recognized in consolidated statement of comprehensive income, and its share of post acquisition
movements in other comprehensive income is recognized in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred
obligations or made payments on behalf of the associate. The Group determines at each reporting date whether there is any objective evidence that
the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate
and its carrying value and recognises the amount adjacent to “share of profitloss of an associate” in the profit or loss. Unrealized gains on transactions between the Group and its
associates are eliminated to the extent of its interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Adjustments are made where necessary to conform the associate’s accounting policies with the policies adopted by the Group.
Profits or losses resulting from upstream and downstream transactions between the Group and its associates are recognized in the Group’s consolidated financial statements only to
the extent of unrelated investor’s interests in the associates. Dilution gains or losses arising from investments in associates are recognized in the
consolidated statement of comprehensive income.
q. Investment Properties
Investment properties are measured at cost, except land, including transaction costs, less accumulated depreciation and any impairment loss. The carrying amount includes the cost
of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met; and excludes the costs of day-to-day servicing of an investment
property. Investment properties are derecognized when either they have been disposed of or when
the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an
investment property are recognized in the consolidated statement of comprehensive income in the year of retirement or disposal.
Investment properties, depreciated over its estimated useful life using the straight-line method at 5 per annum.
Transfers are made to investment properties when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another
party or ending of construction or development. Transfers are made from investment properties when, and only when, there is a change in use, evidenced by commencement of
owner-occupation or commencement of development with a view to sale.
