Trade Receivables Inventories Lease

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued 02

h. Trade Receivables

Trade receivables are recognized and carried at original invoice amount less provision for declining in value. A provision for declining in value is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

i. Inventories

Inventories are stated at cost or net realizable value, whichever is lower. Cost is based on the average method and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to its present location and condition. Finished goods and goods in process are including fixed and variable factory overhead in addition to direct materials and labor. Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale. Inventory provision are determined by the calculation of inventory value by the end of the accounting period.

j. Lease

Effective January 1, 2008, the Statement of Financial Accounting Standard PSAK No. 30 Revised 2007, Leases supersedes PSAK No. 30 1990. Based on PSAK No. 30 Revised 2007, the determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and whether the fulfillment of the arrangement is depend on the use of a specific asset and the arrangement conveys a right to use the asset. Under this revised PSAK, leases that transfer substantially to the lessee all the risks and rewards incidental to ownership of the leased item are classified as finance leases. Moreover, leases which do not transfer substantially all the risks and rewards incidental to ownership of the leased item are classified as operating leases. Based on PSAK No. 30 Revised 2007, under a finance lease, the Entity recognize assets and liabilities in its consolidated statements of financial position at amounts equal to the fair value of the leased property, if lower, the present value of the minimum lease payments, each determined at inception of the lease. Minimum lease payments are apportioned between the finance expenses and the reduction of outstanding liability. The finance expenses is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rent are changed as expenses in the periods in which they are incurred. Finance expenses are reflected in profit and loss. Capitalized leased assets presented under the account of property, plant and equipment are depreciated over the shorter of the estimated useful life of the assets and the lease term, if there is no reasonable certainty that the Entity will obtain ownership by the end of the lease term. Under an operating lease, the Entity recognized lease payments as an expense on a straight- line method over the lease term.

k. Fixed Assets