PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,2005 AND 2004 AND FOR THE SIX MONTHS PERIOD THEN ENDED Continued
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h. Inventories
Inventories are stated at cost or net realized value, whichever is lower. Cost is determined using the moving average method. Allowances for inventory obsolescence and decline in
value of the inventories are provided to reduce the carrying value of inventories to their net realized value.
A provision for inventory obsolescence is recognized based on management‟s review of the condition of each inventories category at the end of the year.
A provision for decline in value of the inventories is provided based on management‟s evaluation of the estimated selling price in the ordinary course of business, less cost of
completion and selling expenses.
i. Prepaid Expenses
Prepaid expenses are amortized over their beneficial period using the straight-line method.
j. Due From Plasma Projects
Due from plasma project is presented net of funding received from the banks and allowance for doubtful accounts. The allowance for doubtful account is estimated based on
management‟s periodic evaluation on the collectibility of the excess of accumulated development costs over the financing committed by the banks.
k. Real Estate Assets
Real estate assets consist of accumulated expenses paid in relation to the construction of building plaza, kiosks and shophouses under a Build, Operate and Transfer BOT
agreement, the term used rights hak pakai berjangka of which are being sold separately . The remaining units available for sale are stated at cost or net realized value, whichever is
lower. Cost is determined using the average cost method based on the saleable area of the units.
l. Plantations
Mature Plantations Palm and hybrid coconut plantations are considered mature in 4 - 5 years, while orange
plantations are considered mature in 4 years. First harvest of pineapple plantations can be done at the age of 22 months, with second harvest at the age of 33 months. Actual maturity
depends on vegetative growth and management evaluation. Mature plantations, except for pineapple plantation, are depreciated using the straight line
method, based on the estimated productive lives of the plantation as follows :
Years Palm and hybrid coconut plantations
25 Orange plantations
10 Depreciation of pineapple plantations is computed using the following rates:
PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30,2005 AND 2004 AND FOR THE SIX MONTHS PERIOD THEN ENDED Continued
- 6 - Rates
First harvest plantation age of 22 months 67
Second harvest plantation age of 33 months 33
Depreciation expenses of matured plantation is charged to cost of goods sold. Immature Plantations
Immature plantations represent accumulated costs incurred on palm, hybrid coconut, orange and pineapple plantations before these mature and produce crops. Such costs include the
cost of land preparation, seedlings, fertilization, maintenance, labor, depreciation of property, plant and equipment, interest and other borrowing costs on debts incurred to finance the
development of plantations until maturity. Immature plantations are transferred to mature plantations when these start normal yield.
m. Property, Plant and Equipment
