PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 9 - of the leased asset and recognized over the lease term in the same basis as rental
income. Finance lease transactions are treated and recorded as leased assets, included in
“Property, plant and equipment”, and leased liabilities as “Finance lease liabilities” at the inception of the lease term. The leased assets and lease liabilities under the capital lease
method are recorded at the present value of the total lease installment payments plus residual value option price to be paid by the lessee at the end of the lease term. During
the lease term, each lease payment is allocated and recorded as repayment of the lease liabilities and interest expense thereon based on an interest rate applied to the carrying
amount of the related lease liabilities. Leased assets are depreciated using the same method and estimated useful lives used
for directly acquired property, plant and equipment.
o. Deferred Charges on Landrights
Deferred charges relating to the legal processing of landrights are amortized using the straight
– lines method over the legal terms of the landrights, since the legal term of the landrights is shorter than its economic life. The amortization begins when the legal
processing of landrights is substantially complete.
p. Treasury Stocks
Treasury stocks are accounted for using the par value method.
Under the par value method, the treasury stock is accounted for at par value as “Treasury Stock” account and presented as a reduction of “Capital Stock” account. If the treasury stock
had originally been issued at a price above par value, the “Additional Paid-in Capital” account is debited for the related difference between the par value and the reacquisition cost of the
treasury stocks.
q. Stock Issuance Costs
Stock issuance cost are deducted from the “Additional paid – in capital “portion of the stocks
issued and are not amortized..
r. Impairment of Assets
An assessment by management of the assets value is made at each balance sheet date to determine whether there is any indication of impairment of any assets and possible written
– down to its recoverable amount whenever events or changes in circumstances indicate that
the asset value is impaired. An impairment loss is recognized only if the carrying amount of an asset exceeds the
recoverable amount.
An asset’s recoverable amount is computed as the higher of the asset’s value in use and its net selling price. On the other hand, a reversal of an impairment loss is
recognized whenever there is indication that the asset is not impaired anymore. The amount of impairment loss reversal of impairment loss is charged to credited in
current year
’s operations.
PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2010 AND 2009 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 10 -
s. Revenue and Expense Recognition
