These consolidated financial statements are originally issued in Indonesian language.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nine months ended September 30, 2008 and 2007 Expressed in rupiah, unless otherwise stated
12
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued b. Principles of Consolidation continued
In compliance with PSAK No. 40, “Accounting for Changes in the Value of Equity of a Subsidiary Associated Company”, the differences between the carrying amount of the Company’s investment
in, and the value of the underlying net assets of, the subsidiaryinvestee arising from changes in the latter’s equity which are not resulting from transactions between the Company and the
concerned subsidiaryinvestee, are recorded and presented as “Differences Arising from Changes in the Equity of Subsidiaries” under the Shareholders’ Equity section of the consolidated balance
sheets. Accordingly, the resulting difference arising from the change in the equity of PT Indomix Perkasa in connection with its application of the provisions of PSAK No. 50, “Accounting for
Investments in Certain Securities”, is recorded and presented as part of this account see item d below.
c. Cash
Equivalents
Time deposits with maturities of three months or less at the time of placement and not pledged as collateral for loans and other borrowings are considered as “Cash Equivalents”.
d. Short-term
Investments
Investments in equity securities listed on the stock exchanges are classified as “Short-term Investments”.
Equity securities classified as available-for-sale are stated at market values. Any unrealized gains or losses on appreciationdepreciation in market values of the equity securities are recorded and
presented as part of “Unrealized GainsLosses on Available-for-Sale Securities” under the Shareholders’ Equity section of the consolidated balance sheets. These are credited or charged to
operations upon realization.
When a decline in the fair value of an available-for-sale equity securities has been recognized directly to equity and there is objective evidence that the equity securities are impaired, the
cumulative losses that had been recognized directly in equity are removed from equity and recognized in profit and loss even though the equity securities have not been derecognized.
e. Allowance for Doubtful Accounts
Allowance for doubtful accounts is provided based on a review of the status of the individual receivable accounts at the end of the year.
f. Transactions with Related Parties
The Company and Subsidiaries have transactions with certain parties which have related party relationships as defined under PSAK No. 7, “Related Party Disclosures”.
All significant transactions and balances with related parties, whether or not conducted under terms and conditions similar to those granted to third parties, are disclosed in Note 23.
g. Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the weighted average method, except for spare parts which use the moving average method.
Allowance for inventory losses is provided to reduce the carrying value of inventories to their net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business less estimated cost of completion and estimated cost necessary to make the sale.
These consolidated financial statements are originally issued in Indonesian language.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Nine months ended September 30, 2008 and 2007 Expressed in rupiah, unless otherwise stated
13
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h.
