PT SAMPOERNA AGRO Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2007 and 2006
Expressed in thousands of Rupiah, unless otherwise stated
13
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
g. Prepaid
expenses
Prepaid expenses are charged to operations over the periods benefited using straight-line method of amortization.
h. Plantation
assets
Plantation assets are classified as immature plantations and mature plantations. Immature plantation
All costs relating to the development of the oil palm and rubber plantations for the Group’s own operations Inti plantations together with a portion of indirect overheads, including general and
administrative expenses incurred, and also interest expenses from loan used in developing immature plantation are capitalized until commercial production is achieved. These costs will be
transferred to mature plantations and amortized over the estimated 20 years productive lives of the oil palm and rubber plantations, starting from the commencement of commercial production.
Mature plantation In general, oil palm plantations are considered mature four years after planting and rubber
plantations are considered mature five to six years after planting. Actual time to maturity is dependent upon vegetative growth and is assessed by management.
Mature plantations are stated at cost, except for certain mature plantations which are stated at revalued amounts, less accumulated amortization.
i. Fixed
assets
Fixed assets are stated at cost, except for certain fixed assets which are stated at revalued amounts, less accumulated depreciation.
Fixed assets, except land, are depreciated using the straight-line method over their estimated useful lives as follows:
Years
Buildings 20
Infrastructures 20
Storage tanks 16
Machinery and equipments 12
Vehicles and heavy equipments 4-8
Office equipments 4-8
Since January 1, 2004, the Group, except Sungai Rangit, changed its depreciation method from the double-declining balance method to the straight-line method for vehicles and heavy equipment
and office equipment. The revision to the depreciation method and estimated useful lives was based on a review of the future economic lives of such assets in connection with the revaluation of
certain fixed assets of the Company and management’s opinion that the revised depreciation approach more appropriately reflects the utilization of such assets over their estimated economic
lives.
PT SAMPOERNA AGRO Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Six Months Ended June 30, 2007 and 2006
Expressed in thousands of Rupiah, unless otherwise stated
14
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued i.
