PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2005 and 2004 Expressed in rupiah, unless otherwise stated
11
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Cash Equivalents
Time deposits and other short-term investments with maturities of three months or less at the time of placement or purchase 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 “Unrealized Losses on Available-for-Sale Securities - Net” under the Shareholders’ Equity section of the consolidated balance sheets. These are credited or charged to operations
upon realization.
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 using terms
and conditions similar to those granted to third parties, are disclosed in Note 21.
g. Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the moving average method. Allowance for inventory losses is provided to reduce the carrying value of
inventories to their net realizable values. 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.
h. Prepaid Expenses
Prepaid expenses are amortized over the periods benefited using the straight-line method. The non- current portion of prepaid expenses is shown as part of “Other Non-current Assets” in
the consolidated balance sheets.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2005 and 2004 Expressed in rupiah, unless otherwise stated
12
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
