PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
25
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED c.
Business combination continued
included in administrative expenses. When the Company or a subsidiary acquires a business, it assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded
derivatives in host contracts by the acquiree. If the business combination is achieved in stages, the acquisition-date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss. For bargain purchases, before recognizing a gain on a bargain purchase. the acquirer reassesses whether it has
correctly identified all of the assets acquired and all of the liabilities assumed and recognizes any additional assets or liabilities that are identified in that review. If that gain remains after applying the identification, the acquirer
recognizes the resulting gain in profit or loss on the acquisition date. The gain is attributed to the acquirer. Any contingent consideration to be transferred by the acquirer is recognized at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognized in accordance with PSAK No. 55 Revised 2014 either in profit or loss or as other comprehensive
income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.
At acquisition date, goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the net identifiable assets acquired and liabilities assumed. If
this consideration is lower than the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination, from the acquisition date is allocated to each of
the Group’s Cash-Generating Units “CGUs” that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those CGUs.
Where goodwill forms part of a CGU and part of the operations within that CGU is disposed of, the goodwill associated with the operations disposed of is included in the carrying amount of the operations when determining
the gain or loss on disposal of the operations. Goodwill disposed of in this circumstance is measured based on the relative values of the operations disposed of and the portion of the CGU retained.
d. Cash equivalents
Time deposits with maturities of three months or less at the time of placement, which are not restricted as to withdrawal or are not pledged as collateral for loans, are classified as “Cash Equivalents”. Cash in banks and time
deposits which are restricted or pledged are presented as part of “Other Non-current Financial Assets”.
e. Investment in associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control over those policies.
The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.
The Group’s investments in its associate are accounted for using the equity method. Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to
recognize changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortized nor individually tested
for impairment. The consolidated statements of profit and loss and other comprehensive income reflect the Group’s share of the
results of operations of the associate. Any change in OCI of this investee is presented as part of the Group’s OCI.
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED e. Investments in associates continued
In addition, when there has been a change recognized directly in the equity of the associate, the Group recognizes its share of the change, when applicable, in the consolidated statements of changes in equity. Unrealized gains and
losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.
The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the consolidated statements of profit and loss and other comprehensive income outside operating profit and represents profit or loss
after tax and NCI in the subsidiaries of the associate. The financial statements of the associate are prepared for the same reporting period as the Group. When
necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognize an impairment
loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount
of impairment as the difference between the recoverable amount of the associate and its carrying value, then recognizes the loss as “share of profit of an associate” in the consolidated statements of profit or loss and other
comprehensive income. Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment
at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained investment and proceeds from disposal is recognized in profit or loss.
f. Transactions with related parties
A related party is a person or entity that is related to the Group. a. A person or a close member of that persons family is related to the Group. if that person;
i
has control or joint control over the Group;
ii
has significant influence over the Group; or
iii
is a member of the key management personnel of the Group or of the parent entity of the Company. b. An entity is related to the Group if any of the following conditions applies:
i
the entity and the Group are members of the same group;
ii
one entity is an associate or joint venture of the Group or an associate or joint venture of a member of a group of which the Group is a member;
iii
both entity and the Group are joint ventures of the same third party;
iv
the Group is a joint venture of a third entity and the other entity is an associate of the third entity;
v
the entity is a post-employment benefit plan for the benefit of employees of either the roup or an entity related to the Group;
vi
the entity is controlled or jointly controlled by a person identified in point a;
vii
a person identified in point ai has significant influence over the entity or is a member of the key management personnel of the entity or of a parent of the entity;
The transactions with related parties are made based on terms agreed by the parties. Such terms may not be the same as those for transactions with unrelated parties.
The details of the accounts and the significant transactions entered into with related parties are presented in Note 32.
g. Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the weighted average method.
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
g. Inventories continued
The cost of land under development consists of cost of undeveloped land, direct and indirect development costs related to real estate development activities and borrowing costs. Land under development is transferred to
landplots available for sale when the land development is completed. Total project cost is allocated proportionately to the saleable landplots based on their respective areas.
The cost of apartment under construction consists of the cost of developed land, construction costs, borrowing costs and other costs related to the development of the apartment. Costs capitalized to apartment under
construction are allocated to each apartment unit using the saleable area method. The cost of land development, including land which is used for roads and infrastructure or other unsaleable area,
is allocated using saleable area. The cost of buildings and apartments under construction is transferred to houses, shops and apartments strata
title available for sale when the construction is substantially completed. For residential property project, its cost is classified as part of inventories upon the commencement of
development and construction of infrastructure. For commercial property project, upon the completion of development and construction of infrastructure, its cost remains as part of inventories or is reclassified to the
related investment properties account, whichever is more appropriate. Assessment of the cost estimate is done at the end of each reporting period until the project is substantially
completed , if there is a change basis , the Company will revise the cost . Other inventories, consisting of food, beverages and other inventories, are stated at cost or net realizable value,
whichever is lower. Cost is determined using the weighted average method.
h. Prepaid expenses
