Investments in Associates Summary of Significant Accounting and Financial Reporting Policies
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
Long-term employee benefits liability Long-term employee benefits liability repesents post-employment benefits, unfunded
defined-benefit plans which amounts are determined based on years of service and salaries of the employees at the time of pension. The actuarial valuation method used to determine
the present value of defined-benefit liability, related current service costs, and past service costs is the Projected Unit Credit. Current service costs, interest costs, vested past service
costs, and effects of curtailments and settlements if any are charged directly to current operations. Past service costs which are not yet vested and actuarial gains and losses
arising from experience adjustments and changes in actuarial assumptions in excess of the corridor or greater of 10 of the fair value of plan assets or 10 of the present value of the
defined benefit obligation are charged or credited to profit or loss over the employees expected average remaining working lives, until the benefits become vested.
ad. Income Tax
Current tax expense is determined based on the taxable income for the year computed using prevailing tax rates.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statements’ carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for deductible
temporary differences and carryforward tax benefit of unused fiscal losses, to the extent that it is probable that taxable income will be available in future periods against which the
deductible temporary differences and carryforward tax benefit of fiscal losses, can be utilized.
Deferred tax is calculated at the tax rates that have been enacted or substantively enacted at the consolidated statement of financial position date. Deferred tax is charged or credited
in the consolidated statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also charged or
credited directly to equity. Deferred tax assets and liabilities are offset in the consolidated statement of financial
position, except if these are for different legal entities, in the same manner the current tax assets and liabilities are presented.
Amendments to tax obligations are recorded when an assessment is received or, if appealed against by the Group, when the result of the appeal is determined.
ae. Earnings per Share Earnings per share are computed by dividing net income attributable to owners of the
Company by the weighted average number of shares outstanding during the year. Diluted earnings per share are computed by dividing net income attributable to owners of
the Company by the weighted average number of shares outstanding during the year as adjusted for the effects of all potentially dilutive ordinary shares.
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PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
For the Years Ended December 31, 2014 and 2013 Figures are Presented in Millions of Rupiah,unless Otherwise Stated
af. Segment Information
Segment information is prepared using the accounting policies adopted for preparing and presenting the consolidated financial statements.
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate
resources to the segments and to assess the Group’s performance.
An operating segment is a component of an entity: 1. That engages in business activities which it may earn revenue and incur expenses
including revenue and expenses relating to the transaction with other components of the same entity;
2. Whose operating results are reviewed regularly by the entity’s chief operating decision maker to make decision about resources to be allocated to the segments and assess
its performance; and 3. For which discrete financial information is available.
Information reported to the chief operating decision maker for the purpose of resources allocation and assessment of its performance is more specifically focused on the category of
each product, which is similar to the business segment information reported in the prior period.
ag. Provisions
Provisions are recognized when the Group has present obligation legal or constructive as a result of a past event, it is probable that the Group will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to
settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated
to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured
reliably.