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02
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
b. Principles of Consolidation continued
In case of loss of control over a Subsidiary, the Entity: - Derecognizes the assets including goodwill and liabilities of the Subsidiary;
- Derecognizes the carrying amount of any NCI; - Derecognizes the cumulative translation differences, recorded in equity, if any;
- Recognizes the fair value of the consideration received; - Recognizes the fair value of any investment retained;
- Recognizes any surplus or deficit in profit or loss; and - Reclassifies the parents share of components previously recognized in other comprehensive income to profit or loss or
retained earnings, as appropriate. NCI represents the portion of the profit or loss and net assets of the Subsidiaries not attributable, directly or indirectly, to the
Entity, which are presented in consolidated statements of comprehensive income and under the equity section of the consolidated statements of financial position, respectively, separately from the corresponding portion attributable to the
equity holders of the parent entity.
c. Foreign Currency Translation
Effective on January 1, 2012, Entity applied PSAK No. 10 Revised 2010, “The Effects of Changes in Foreign Exchange Rates” the impact of which is disclosed in Note 2u.
The books of accounts of the Entity are maintained in Rupiah, while their functional currency is US Dollar. Accordingly, at the end of each reporting period, the books of accounts of the Entity are remeasured to US Dollar using the procedures as
mentioned in Note 2u and are then translated to presentation currency in Rupiah using the procedures which are also disclosed in Note 2u.
The books of accounts of Indonesia Subsidiaries are maintained in Rupiah Rp, while the books of accounts of Hongkong Subsidiary are maintained in Hongkong Dollar, which are also the functional currency of the Subsidiaries.
For consolidation purposes, the accounts of those Subsidiaries are translated into Rupiah using the following mechanism: • Assets and liabilities are translated using exchange rate at reporting date;
• Revenues and expenses are translated at the average rates of exchange for the period; • Equity accounts are translated at historical rates; and
• Any resulting foreign exchange is presented as “Exchange Difference Due to Translation of Financial Statements” and is shown as part of other components of equity in the consolidated statement of financial position.
Exchange rates used as of December 31, 2012, 2011 and 2010 are as follows: 2012
2011 2010
United States Dollar 1Rupiah full amount 9,670
9,068 8,991
EURO 1Rupiah full amount 12,810
11,739 11,956
Hongkong Dollar 1Rupiah full amount 1,247
1,167 1,155
Singapore Dollar 1Rupiah full amount 7,907
6,974 6,981
02
d. Revenue and Expenses Recognition
Revenue is recognized to the extent when it is probable that the economic benefits will flow to the Entity and its Subsidiaries and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognized: • Sale of goods
Revenue is recognized when the significant risk and rewards of ownership of the goods have been passed to the buyer. • Rendering of services
Revenue is recognized by reference to the stage of completion of the transaction at the consolidated statements of financial position dates and there is no significant uncertainties remain considering any associated cost.
• Interest Income is recognized as the interest accrues taking into account the effective yield on the related asset, unless
collectability is in doubt. Expenses are recognized when incurred accrual basis.
e. Cash and Cash Equivalents
Cash on hand and in banks and short-term deposits held to maturity are carried at cost. Cash and cash equivalents are defined as cash on hand and in banks, demand deposits and short-term and highly liquid
investments readily convertible to known amounts of cash and subject to insignificant risk of changes in value. For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash on hand and in
banks, and short-term deposits with maturities of less than three months.
f. Investments
Short-term deposits with maturities of less than three months but held for collateral or have a restriction and short-term deposits with maturities of more than three months are presented as short-term investments and carried at nominal value.
g. Financial Instrument
Effective on January 1, 2012, the Entity and its Subsidiaries have adopted PSAK 50 revised 2010, Financial Instruments: Presentation, and PSAK 55 Revised 2011, Financial Instruments: Recognition and Measurement and PSAK 60, Financial
Instruments: Disclosure. PSAK No. 50 Revised 2010 contains the requirements for the presentation of financial instruments and identifies the
information that should be disclosed. The presentation requirements apply to the classification of financial instruments, from the perspective of the issuer, into financial assets, financial liabilities and equity instruments; the classification of related
interest, dividends, losses and gains; and the circumstances in which financial assets and financial liabilities should be offset. This PSAK requires the disclosure of, among others, information about factors that affect the amount, timing and certainty of
an entity’s future cash flows relating to financial instruments and the accounting policies applied to those instruments.
PSAK No. 55 Revised 2011 establishes the principles for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This PSAK provides the definitions and characteristics of derivatives, the
categories of financial instruments, recognition and measurement, hedge accounting and determination of hedging relationships, among others.
PSAK No. 60 requires disclosures of significance of financial instruments for financial position and performance; and the nature and extent of risks arising from financial instruments to which the Entity is exposed during the period and at the end of
the reporting period, and how the Entity manages those risks.
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2012 and 2011 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
PT ERATEX DJAJA Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
For the years ended December 31, 2012 and 2011 Expressed in thousands of Rupiah and in thousands of United States Dollars, unless otherwise stated
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
g. Financial Instrument continued Financial Assets
