These consolidated financial statements are originally issued in Indonesian language.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003 and 2002 Expressed in rupiah, unless otherwise stated
12
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued h.
Prepaid Expenses
Prepaid expenses are amortized over the periods benefited using the straight-line method. The non-current portion of prepaid expenses are shown as part of “Other Non-Current Assets” in
the consolidated balance sheets.
i. Property, Plant and Equipment
Property, plant and equipment are stated at cost, except for certain assets revalued in accordance with government regulations, less accumulated depreciation, amortization and depletion. Certain
machinery and equipment related to the production of cement are depreciated using the unit-of- production method, while all other property, plant and equipment are depreciated using the
straight-line method based on their estimated useful lives as follows:
Years Land improvements, quarry, and buildings and structures
8 - 30 Machinery and equipment
5 - 10 Leasehold improvements, furniture, fixtures and office
equipment, and tools and other equipment 5
Transportation equipment 5
Land is stated at cost and is not depreciated. Construction in-progress is stated at cost. Costs are reduced by the amount of revenue generated
from the sale of finished products during the trial production runs less the related cost of production. The accumulated costs will be reclassified to the appropriate property, plant and
equipment accounts when the construction is substantially completed and the asset is ready for its intended use.
The costs of maintenance and repairs are charged to operations as incurred; significant renewals and betterments, which meet the capitalization criteria under PSAK No. 16, “Property, Plant and
Equipment”, are capitalized. When assets are retired or otherwise disposed of, their carrying values and the related accumulated depreciation, amortization or depletion are removed from the
accounts, and any resulting gains or losses are credited or charged to current operations.
j. Impairment of Assets
A review of asset values is conducted at the end of the year to determine whether an impairment has occurred in accordance with PSAK No. 48, “Impairment in Asset Value”. PSAK No. 48
requires companies to estimate the recoverable amount of all their long-lived assets and recognize the impairment in asset value as a loss in the statements of income whenever the recoverable
amount of the asset is lower than its carrying value.
These consolidated financial statements are originally issued in Indonesian language.
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003 and 2002 Expressed in rupiah, unless otherwise stated
13
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k.
