PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009 AND 2008 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 9 - Years
Palm and hybrid coconut plantations 25
Orange plantations 10
Depreciation of pineapple plantations is computed using the following rates: 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 are stated at cost which 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 for as long as the carrying value of such immature plantations do not exceed the lower of replacement cost and
recoverable amount.. Immature plantations are not depreciated. Immature plantations are transferred to mature plantations when these start normal yield.
n. Property, Plant and Equipment
Direct acquisitions
Direct acquisitions of property, plant and equipment, except for land, are stated at cost, less accumulated depreciations and any impairment in value and is not depreciated.
The initial cost of property, plant and equipment consist of its purchase price, including import duties and non-refundable taxes and any directly attributable cost in bringing the
property, plant and equipment to its working condition and location for its intended use. Depreciation expense are allocated proportionately to mature and immature plantations
based on their total area. Depreciation expense allocated to mature plantations are charged to cost of goods sold, while expenses allocated to immature plantations are
capitalized. Expenditures incurred after the property, plant and equipment have been put into
operations, such as repairs and maintenance cost, are normally charged to operations in the year such costs are incurred. In situations where it can be clearly demonstrated that
the expenditures have resulted in an increase in the future economic benefits expected to be obtained from the use of the property, plant and equipment beyond its originally
assessed standard of performance, the expenditures are capitalized as additional cost of property, plant and equipment. Depreciation is computed on a straight-line basis over the
property, plant and equipment‟s useful lives as follows:
PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009 AND 2008 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 10 - Years
Buildings and land improvements 20
Machinery 10
Vehicles and heavy equipment 5
Furniture, fixtures and equipment 5
The carrying values of property, plant and equipment are reviewed for impairment when evens or changes in circumstances indicate that the carrying values may not be
recoverable. When each major inspection is performed, its cost is recognized in the carrying amount
of the item of property, plant and equipment as a replacement if the recognition criteria are satisfied. Such major inspection is capitalized and amortized over the next major
inspection activity. When assets are sold or retired, the cost and related accumulated depreciation and
amortization and any impairment loss are eliminated from the accounts. An item of property, plant and equipment is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Any gains or loss arising from derecognition of property, plant and equipment calculated as the difference
between the net disposal proceeds, if any, and the carrying amount of the item is included in the consolidated statements of income in the year the item is derecognized.
The assets‟s residual values, useful lives and depreciations method are reviewed and adjusted if appropriate, at each financial year end.
Construction in Progress Construction in progress represents property, plant and equipment under construction
which is stated at cost, and is not depreciated. The accumulated costs will be reclassified to the respective property, plant and equipment account and will be depreciated when
the construction is substantially complete and the asset is ready for its intended use.
Assets for Lease
Assets for lease consisting of vessels, are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful
life of the assets of 15 years. Rental income is presented net of all expenses incurred related to the assets for lease, including depreciation expenses, and is shown under the
“ Other income Expenses “ account in the consolidated statements of income.
Property Not Used in Operations
Property not used in operations is stated at the lower of carrying value and net realizable value.
Property not in used in operations are depreciated using the same method and estimated useful lives for directly acquired properties.
PT. TUNAS BARU LAMPUNG Tbk AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2009 AND 2008 AND FOR THE NINE MONTHS PERIOD THEN ENDED Continued
- 11 - -
Leases
Effectively January 1, 2008, Finance leases which transfer to the Company or its subsidiaries as lessee substantially all the risks and benefits incidental to ownership of
the leased item, are capitalized at the inception of the lease at their fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease
payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest in the remaining balance of the
liability. Finance charges are charged directly against consolidated statements of income.
Capitalized leased assets are depreciated over the estimated useful life of the asset except if there is no reasonable certainty that the Company will obtain ownership by the
end of the lease term, in which case the capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease
payments are recognized as an expense in the consolidated statements of income on a straight-line basis over the lease term.
Lease where the Company or its subsidiaries as lessor retain substantially all the risks and benefits of the ownership of the asset are classified as operating leases. Initial
directs costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term in the same basis as
rental income. Prior to January 1, 2008, lease transactions are accounted for under the capital lease
method when all of the following criteria are met:
1 The lessee has the option to purchase the leased asset at the end of the lease
term at a price mutually agreed upon at the inception of the lease agreement. 2
All periodic lease payments made by the lessee plus residual value shall represent a return of the cost of leased asset and interest thereon as the profit of the lessor.
3 Minimum lease period is two years.
Lease transactions that do not meet the above criteria are recorded as operating leases. Finance lease transaction are treated and recorded as leased assets included in
“Property, plant and equipment” and lease liabilities as “ Finance leased liabilities “ at the inception of the lease term. The leased assets and lease liabilities under the capital
lease method are recorded at the present value of the total lease installment payments plus residual value option price to be paid by the lessee at the end of lease term.
During the lease term, each lease payment is allocated and recorded as repayment of the lease liabilities and interest expenses thereon based on an interest rate applied to
the carrying amount of the related lease liabilities.
Leased assets are depreciated using the same method and estimated useful lives used for directly acquired property, plant and equipment.
o. Deffered Charges on Landrights
