PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 24 - Transactions with non-controlling interests that do not result in loss of control are accounted
for as equity transactions. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is
recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Business Combinations
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at
acquisition date fair value and the amount of any NCI in the acquiree. For each business combination, the acquirer measures the NCI in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition related costs incurred are directly expensed and included in administrative expenses.
When the Group acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as of the acquisition date.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the
acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability will be recognized in accordance with PSAK No. 55 either in profit or loss or as other comprehensive income. If the contingent
consideration is classified as equity, it should not be measured until it is finally settled within equity.
At acquisition date, goodwill is initially measured at cost being the excess of the aggregate of the consideration transferred and the amount recognized for NCI over the net identifiable
assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination
is, from the acquisition date, allocated to each of the Company andor its subsidiaries’ cash- generating units “CGU” that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquired are assigned to those CGUs. Where goodwill forms part of a CGU and part of the operation within that CGU is disposed
of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the CGU retained.
d. Transactions Among Entities under Common Control
Entities under common control are parties individual, company, or other form of entities which directly or indirectly through one or more intermediaries control or are controlled by
or are under the same control.
PT SINAR MAS MULTIARTHA Tbk AND ITS SUBSIDIARIES Notes to Consolidated Financial Statements
December 31, 2012 and 2011 and January 1, 2011December 31, 2010 and For the Years then Ended December 31, 2012 and 2011
Figures are Presented in Millions of Rupiah, unless Otherwise Stated
- 25 - Acquisition of a subsidiary from entities under common control which is a reorganization of
companies under common control pooling of interest, is accounted for in accordance with PSAK No. 38 Revised 2004, “Accounting for Restructuring Transactions among Entities
under Common Control. Transfer of assets, liabilities, shares and other instruments of ownership among entities under common control do not result in a gain or loss to the group
or to the individual company within the same group. Since a restructuring transaction among entities under common control does not result in a change of the economic substance of the
ownership of assets, liabilities, shares and other instruments of ownership which are exchanged, assets or liabilities transferred are recorded at book values as business
combination using the pooling of interest method. Any difference between the transfer price and book value of each restructuring transaction
between entities under common control is recorded in the account “Difference in value of restructuring transactions among entities under common control,” presented as a
component of equity. The balance of “Difference in value arising from restructuring transactions among entities on
control” account is taken to the consolidated statements of comprehensive income as realized gain or loss as a result of 1 loss of under common control substance, and
2 transfer of the assets, liabilities, equity or other ownerhip instruments to another party who is not under common control. On the other hand, when there are reciprocal
transactions between entities under common control, the existing balance is set - off with the new transaction, hence creating a new balance of this account
e. Foreign Currency Translation
Functional and Reporting Currencies Items included in the financial statements of each of the Group’s companies are measured
using the currency of the primary economic environment in which the entity operates the functional currency.
The consolidated financial statements are presented in Rupiah which is the Company’s functional and presentation currency.
Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the consolidated statement of comprehensive income. Non-monetary assets
that are measured at fair value are translated using the exchange rate at the date that the fair value was determined. Translation differences on equities and similar non-monetary
items measured at fair value are recognized in profit or loss. As of December 31, 2012 and 2011, the conversion rates used by the Group were the
middle rates of Bank Indonesia of Rp 9,670 in Rupiah full amount and Rp 9,068 in Rupiah full amount, respectively, per US 1.
The conversion rates used by BS a subsidiary engaged in banking to translate monetary assets and liabilities as of December 31, 2012 and 2011, are the Reuters rate at 16:00 WIB
of Rp 9,637.5 in Rupiah full amount and Rp 9,067.5 in Rupiah full amount, respectively, per US 1.
