PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2017 and for the Six-Month Periods Then Ended Expressed in thousands of Indonesian Rupiah, unless otherwise stated
22
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED n. Impairment of non-financial asset value continued
A previously recognized impairment loss for an asset is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case,
the carrying amount of the asset is increased to its recoverable amount. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds
the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.
Reversal of an impairment loss is recognized in the consolidated statements of profit or loss and other comprehensive income. After such a reversal, the depreciation charge on the said asset is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
o. Stock issuance costs
Costs incurred in connection with the issuance of capital stock are presented as a deduction to additional paid-in- capital.
p. Revenue and expense recognition
Revenues from real estate sales are recognized as follows: 1 Revenue from sales of houses, shops and other similar property and related land are recognized under the full
accrual method if all of the following conditions are met: 1. A sale is consummated.
2. The selling price is collectible. 3. The seller’s receivable is not subject to future subordination to other loans which will be obtained by the buyer.
4. The seller has transferred to the buyer the usual risks and rewards of ownership in a transaction that is in
substance a sale and does not have a substantial continuing involvement with the property. 2 Revenues from sales of landplots that do not require the seller to construct the building are recognized under the
full accrual method if all of the following conditions are met: 1. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable.
2. The selling price is collectible. 3. The receivable is not subordinated to other loans that will be obtained by the buyer.
4. The land development process is complete so that the seller has no further obligations related to the landplots
sold. 5. Only the landplots are sold. without any requirement for the seller’s involvement in the construction of the
building on the landplots. 3 Revenues from sales of apartments, the construction of which has not been completed, are recognized using the
percentage-of-completion method if all of the following conditions are met: 1. The construction process has already commenced, i.e., the building foundation has been completed and all of
the requirements to commence construction have been fulffiled; 2. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable;
3. The amount of revenue and the cost of the property can be reliably estimated. If any of the above conditions is not met, the payments received from the buyer are recorded as deposits received until
all of the criteria are met. The method used to determine the percentage of completion is the proportion of actual costs incurred to the estimated
total development cost of the real estate project. Rental payments received in advance from tenants of shopping centers are recorded as “Unearned revenues”. Such
unearned income is recognized as income over the terms of the lease contracts. Deposits received from customers are presented as part of “Downpayments received and security deposits”.
PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2017 and for the Six-Month Periods Then Ended Expressed in thousands of Indonesian Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED p. Revenue and expense recognition continued
Rental and membership fees in sports club are recognized as income over the period of rental or membership. Rental and membership fees received in advance are presented as “Unearned Revenues”. Revenues from restaurant
operations are recognized when the goods are delivered or when the services have been rendered. Revenue from hotel room occupancy is recognized on the basis of the period of occupancy. Revenue from other hotel
services is recognized when the services are rendered or the goods are delivered to the customer. Revenues from medical services are recognized at the point of sale or upon delivery of services to the patients.
The elements of costs which are capitalized to real estate development projects include the pre-acquisition cost of
land, cost of land acquisition and other costs attributable to the development activity of real estate. The costs are allocated to real estate development projects using either the saleable area method or the sales value method.
Costs which are not clearly related to a real estate project, such as general and administrative expenses, are recognized as an expense as they are incurred.
If a certain project is estimated to generate a loss, a provision must be recognized for the amount of the loss. The revision of estimated costs or revenues, if any, which are generally attributed to real estate development activities
must be allocated to ongoing and future projects. Revisions resulting from current period and prior period adjustments are recognized in the current period profit and loss, while revisions related to future periods are allocated to the
remaining period of development.
q. Employee benefits
