178
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IABlE, STrong, EFFICIEnT
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 518
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
Ó
S Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
o. Stripping costs
Stripping costs are the costs of removing overburden from a mine. Stripping costs incurred in the development of a mine before production commences are capitalised as part of the cost of developing the mine and are subsequently
depleted using a unit-of-production method on the basis of proved and probable reserves.
The ongoing stripping costs are normally recognised as production costs based on the annual planned stripping ratio. The annual planned stripping ratio is determined based on the average five-year mine plan. In situations
where the actual stripping ratio is not significantly different from the planned stripping ratio, the stripping costs incurred during the year are recognised as production costs. When the actual stripping ratio is significantly higher
than the planned ratio, the excess stripping costs are recorded in the consolidated statement of financial position as deferred stripping costs. These deferred costs are expensed as production costs in periods where the actual
ratio is significantly lower than the average ratio. In addition, the beginning balance of deferred stripping assets is also amortised on a straight-line basis over the remaining mine life, or the remaining term of the CCA, whichever is
shorter.
Changes in the planned stripping ratio are considered as changes in estimates and are accounted for on a prospective basis.
Deferred stripping costs are included in the cost base of assets when determining a cash generating unit for impairment assessment purposes.
p. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or
less. If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
q. Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases net of any incentives received from the lessor are
charged to profit or loss on a straight-line basis over the year of the lease.
Leases of fixed assets where the Group has substantially control all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair
value of the leased property or the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance charges. The interest element of the finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each year.
Fixed assets acquired under finance leases are depreciated similarly to owned assets. If there is no reasonable certainty that the Group will hold the ownership by the end of the lease term, the asset is depreciated over the
shorter of the useful life of the asset and the lease term.
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DAro EnErgy 2013 AnnuAl rEporT
179
PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 519
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2013 AND 2012
Expressed in thousands of
Ö
S Dollars, unless otherwise stated
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
r. Provisions
