PT SUMMARECON AGUNG Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
As of June 30, 2016 unaudited and December 31, 2015 audited and For the period of six months ended June 30, 2016 and 2015 unaudited
Expressed in thousands of Indonesian Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED p.
Revenue and expense recognize continued
1. A sale is consummated. 2. The selling price is collectible.
3. The seller’s receivable is not subject to future subordination to other loans which will be obtained by the buyer.
4. The seller has transferred to the buyer the usual risks and rewards of ownership in a transaction that is in substance a sale and does not have a substantial continuing involvement with the property.
ii Revenues from sales of landplots that do not require the seller to construct the building are recognized under the full accrual method if all of the following conditions are met:
1. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable. 2. The selling price is collectible.
3. The receivable is not subordinated to other loans that will be obtained by the buyer. 4. The land development process is complete so that the seller has no further obligations related to the
landplots sold. 5. Only the landplots are sold. Without any requirement for the seller’s involvement in the construction of the
building on the landplots. iii Revenues from sales of apartments, the construction of which has not been completed, are recognized using the
percentage-of-completion method if all of the following conditions are met: 1. The construction process has already commenced, i.e., the building foundation has been completed and all
of the requirements to commence construction have been fulffiled 2. Total payments by the buyer are at least 20 of the agreed selling price and the amount is not refundable.
3. The amount of revenue and the cost of the property can be reliably estimated. If any of the above conditions is not met, the payments received from the buyer are recorded as deposits received
until all of the criteria are met. The method used to determine the percentage of completion is the proportion of actual costs incurred to the
estimated total development cost of the real estate project. Rental and membership fees in sports club are recognized as income over the period of rental or membership. Rental
and membership fees received in advance are presented as “Unearned Revenues”. Revenues from restaurant operations are recognized when the goods are delivered or when the services have been rendered.
Revenue from hotel room occupancy is recognized on the basis of the period of occupancy. Revenue from other hotel services is recognized when the services are rendered or the goods are delivered to the customer.
The elements of costs which are capitalized to real estate development projects include the pre-acquisition cost of land, cost of land acquisition and other costs attributable to the development activity of real estate. The costs are
allocated to real estate development projects using either the saleable area method or the sales value method. Costs which are not clearly related to a real estate project, such as general and administrative expenses, are
recognized as an expense as they are incurred. If a certain project is estimated to generate a loss, a provision must be recognized for the amount of the loss.
The revision of estimated costs or revenues, if any, which are generally attributed to real estate development
activities must be allocated to ongoing and future projects. Revisions resulting from current period and prior period adjustments are recognized in the current period profit and loss, while revisions related to future periods are allocated
to the remaining period of development.
q. Employee benefits
