PSAK-16-AsetTetap-IAS-16-30052012.pptx.pptx

Aset tetap

1. PSAK 16 – FIXED ASSETS IAS 16 - PROPERTY PLANT & EQUIPMENT

2. Fixed assets Significant components in the Statement of Financial Position. Fixed assets are tangible. Long-term benefit period (> 1 year) Used in operations: production, rental, administration, etc. Depreciation  Depreciation 3 EXAMPLE Land Building Office Building Factory Building Land improvement Equipment Vehicle Machine Office equipment

3. Information User Perspective 4 Recognition of assets Valuation of assets in financial statements Depreciation charges Disclosure of relevant information Quality of assets owned Determination of collateral value Assessment of the company's efficiency level Ownership, existence (rent, credit guarantee) Assessment at acquisition price Acc. Analysis

4. 2011 Changes Overview No Regarding PSAK 16 Rev 2011 PSAK 16 Rev 2007 1 Exceptions to scope Added scope exceptions for: fixed assets are classified as held for sale in accordance with PSAK 58. recognition and measurement of exploration and evaluation assets PSAK 64 Only regulates the scope of exceptions for mining rights and mining reservations, such as oil, natural gas and similar non-renewable natural resources. 2 Scope No longer regulates investment properties that are being built or developed. The scope includes properties built or developed for future use as investment properties. 5

5. 2011 Changes Overview No Regarding PSAK 16 Rev 2011 PSAK 16 Rev 2007 3 Government Grants Does not regulate the terms of recognition of fixed assets originating from grants. Only regulates the recorded value of fixed assets that can be deducted from government grants. Recognition of fixed assets originating from government grants has the following conditions: a. the entity has fulfilled the conditions or prerequisites for the grant; b. grants will be obtained. 4 Fixed assets available for sale The regulation of fixed assets available for sale is removed because it is already regulated in PSAK 58. Regulates the accounting treatment of fixed assets held for sale. 6

6. 2011 Changes Overview No Regarding PSAK 16 Rev 2011 PSAK 16 Rev 2007 5 Depreciation on land Explains that in general land has an unlimited economic life and is therefore not depreciated, unless the entity believes the economic life of the land is limited. The accounting treatment for land obtained with Cultivation Rights, Building Rights and others refers to ISAK 25: Land Rights Accounting treatment for land acquired with Cultivation Rights, Building Rights and others refers to PSAK 47: Land. 7

7. 2007 Changes Overview No Regarding PSAK 16 Revised 2007 Old PSAK 16 1 Term Assets Active 2 Depreciation Combined in PSAK 16. Significant parts are depreciated separately. Regulated in other PSAK 3 Acquisition Cost Components Including: employee benefits costs asset testing costs – sales proceeds from testing Does not regulate these 2 things specifically. 4 Not a Component of Acquisition Cost These incidental activities may occur before or during construction or development activities (e.g. parking) Does not regulate this specifically. 5 Asset Exchange Distinguish between whether there is commercial substance or not. Distinguishing between similar and dissimilar exchanges 8

8. 2007 Changes Overview No Regarding PSAK 16 Revised 2007 Old PSAK 16 6 Measurement After Initial Recognition Cost Model or Revaluation Model Cost Model only, revaluation may be carried out if it is in accordance with government regulations 7 Review Residual Value, Useful Life & Depreciation Method Must be done at least at the end of each year and changes are treated as changes in estimates (prospective). Residual value review is not regulated, changes in useful life are treated prospectively, changes in depreciation method are retrospective. 8 Other Assets Regulated in other PSAK Managing Other Assets 9 Dismantling Cost Recognized as acquisition cost and liability Not set 9

9. Relationship between PSAK 16 and Other PSAKs PSAK 16 PSAK 26 PSAK 48 PSAK 58 PSAK 30 PSAK - Related PSAK 13 & 19 IAS 25 Asset Impairment Non-Current Assets Held for Sale and Discontinued Operations Property Investment Intangible Assets Land Rights Rent Fixed assets Loan interest 10

10. Definition of Fixed Assets Definition : Fixed assets are tangible assets that: (par 6) 1. Held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and 2. Expected to be used for more than one period. 11 Does not apply to Mining rights Mine reservation Features "Used in operation" and not for resale. Long term in nature and usually depreciated Having a form.

11. Recognition of Fixed Assets The acquisition cost of fixed assets must be recognized as an asset if and only if: (par 7) It is probable that the future economic benefits associated with the asset will flow to the entity; and The cost of the asset can be measured reliably. 12 Does not differentiate the recognition criteria at the time of initial recognition and for costs after initial acquisition.

12. Recognition of Fixed Assets 13 Major spare parts and ready-to-use equipment are included in fixed assets if: used more than one period only used for certain assets replaced components are not recognized Unit of measure in recognition according to the entity's conditions. Aggregation or individual criteria: Affecting asset value Affects depreciation costs or operating costs  Profit (potential earning management) Evaluation of the recognition principle  Initial cost of acquiring an asset Further costs to add, replace, repair

13. Initial Acquisition Cost All costs related to assets that have future benefits. Other assets that function so that an asset can have benefits in the future. For example: equipment installed so that the factory can operate in accordance with industrial waste processing regulations. 14

14. Costs After Initial Acquisition 15 Maintenance and repair costs For example: maintenance, spare parts recognized as a burden in the current period's profit and loss statement Asset replacement add assets if Meets the criteria for fixed assets and the replaced components are no longer recorded as assets. Significant inspection recognized as the carrying amount of the asset if Fulfilling the criteria of fixed assets and the previous inspection value (different from physical) is stopped from being recorded.

15. Initial Measurements A fixed asset that meets the qualifications to be recognized as a fixed asset must initially be measured at acquisition cost. (par 15) 16 Acquisition cost Directly attributable costs Costs of dismantling and removing fixed assets and restoring the asset site

16. Acquisition Cost Components a) Acquisition price  import duties and purchase taxes that cannot be credited after deducting purchase discounts and other deductions; b) Costs that are directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Initial estimate of the costs of dismantling and removing the fixed asset and restoring the site on which the asset is located. The liability for these costs arises when the asset was acquired, or because the entity uses the asset during the period for purposes other than to produce inventories. 17

17. Directly Attributable Costs Employee benefit costs arising from the construction or acquisition of fixed assets. Land preparation costs for the factory; Initial handling and delivery charges; Assembly and installation costs The cost of testing the asset to see if it is functioning properly (after deducting the proceeds from the sale of the product) Professional commission 18

18. Not a cost component Cost of opening a new facility New product introduction costs The costs of running a business in a new location include staff training costs. Administration and general overhead Costs when the equipment is not yet fully operational Initial operating losses Costs of relocation and reorganization of the entity's operations. The results of assets before they are utilized (parking results from unused land). Internal profit if the asset is the company's inventory. 19

19. Initial Measurement – ​​Dismantling Cost The company rented a land for 5 years to build a temporary building for office operations. The cost of building the building was 1,200 million. The building, according to the lease agreement, must be dismantled at the end of the lease period. The estimated cost of dismantling the house is 200 million. The acquisition price of the building is 1,200 million plus the estimated cost of dismantling. 200 million: (1 + 8%)⁵ = 135.1167 million) Example 20 Partition costs are recognized in the balance sheet with the following journal entry: Dr Fixed Assets 1,335.167 million Cr Cash 1,200 million Estimated liabilities 135.1167 million Adjustment journal for liabilities year 1 Cr Interest expense 10.889 million Estimated liabilities 10.889 million

20. Initial Measurement – ​​Dismantling Cost PT. Melati rented the building for 4 years starting in 2011. The company spent 800 million to create partitions in the room according to the company's wishes. The contract states that the company must restore the room to its original condition. The cost of restoration is 50 million with a discount rate of 5%. (PV n = 5, i = 5%) = 39.176 million. Example 21

21. Illustration of Acquisition Cost The following are the costs incurred by PT. Kelana in order to acquire new machines for its new products: 5 billion for machine purchases 50 million in labor costs to change the factory interior to suit the use of the machine. 100 million for factory site preparation 80 million for machine delivery 500 million VAT and 500 million import duty. New product promotion costs 800 million The cost of installing the machine is 120 million Initial testing costs 50 million Grand opening costs 130 million The cost of engineering personnel who carry out testing and installation is 30 million Administrative costs included in overhead costs 25 million Example 22 Discuss which is the acquisition cost??

22. Initial Measurements The cost of opening the factory is 5,000+50+100+80+500+500+120+50+30=6.430 billion Costs that are not directly related to the acquisition and installation of the factory machinery should not be recognized. Costs that cannot be included are: Grand opening costs 130 million New product promotion costs 800 million Administrative costs included in overhead costs 25 million Example 23

23. All costs related to the acquisition or construction : Materials, labor, overhead during the construction process, interest costs  if building it yourself Building purchase price and building acquisition rights management. Professional fee Building permit Building Acquisition 24

24. All costs related to the acquisition and preparation of land according to the intended use: Purchase Price Land rights administration costs (certificate, tax/BPHTB, notary fees, etc. Costs for land leveling, demolition of unnecessary buildings. Land Acquisition 25

25. Land and Buildings  Property Investment Investment property according to PSAK 13 is: property (land or a building—or part of a building—or both) held (by the owner or the lessee under a finance lease) to earn rentals or for capital appreciation, or both, and not for: 1. Used in the production or supply of goods or services or for administrative purposes; or Sold in the course of daily business activities. Recognition Criteria Same as PSAK 16 Investment properties are initially measured at cost. Transaction costs are included in the initial measurement. After the initial measurement the company can choose to use the cost or fair value method. 26

26. Measurement after Initial Recognition Fair value model (PSAK 13) Using fair value Using fair value Revaluation model (PSAK 16) Changes in fair value are recognized in the income statement in the period in which they occur. Changes in fair value are recognized in the income statement or equity. There is no shrinkage. Shrinkage. Reflects market conditions at the balance sheet date. Not specific, just requires regularity. Example 27

27. Equipment can include machinery, vehicles, office equipment, factory equipment and other equipment. Acquisition costs include purchase price, Non-creditable taxes or duties Transportation costs Insurance costs during shipping of goods Installation costs and costs for preparing the site for installation Cost for equipment testing Equipment Procurement 28

28. The following expenditures and receipts relate to land, land improvements, and the purchase of buildings. Determine how the company classifies these expenditures? Acquisition Cost Money borrowed to finance construction Expenditure on construction from loans Cost for land leveling Tax costs and building permit processing Insurance payments during the construction process One month insurance policy refund due to early completion of construction. Classification Bank Debt Building Land Land Building (Building) 29

29. Classification Asset Acquisition Architect's fees for building Real estate costs purchased for the factory (land Rp20M and building Rp5M) Commission fees for real estate agents Installation of fence around the property Cost of demolishing buildings and leveling land Money received from the sale of building debris Parking and road fees Tree planting costs (permanent) Building Land Soil Improvement (Land) Soil Improvement The following expenditures and receipts relate to land, land improvements, and the purchase of buildings. Determine how the company classifies these expenditures? 30 Land Land Land

30. Acquisition of Self-Constructed Assets Costs incurred until the asset is ready for use: Materials and labor Overhead  variable costs and the portion of fixed overhead directly related to the construction of the asset. Interest costs during the construction process 31

31. Flowers during Construction Process Alternative charging of interest costs that arise during the construction process 32 Interest costs are not capitalized during construction. Capitalization of actual interest costs during construction (with modifications) Capitalize all interest costs IFRS Rp 0 Rp ? Adding Asset Value

32. PSAK 26 (IFRS 23) capitalizes actual interest costs (with modifications), consistent with the acquisition cost principle. In capitalization there are three considerations Qualifying assets Capitalization period Amount capitalized Capitalized interest, the smaller of the amounts Actual interest charges Avoidable interest – interest that can be avoided is interest costs that would not arise if the development activity were not carried out. Loan Interest (PSAK 26) 33 Special loans  using actual interest costs incurred minus interest income generated from special loans before use. General loans  using the weighted average of funds used multiplied by the average interest.

33. Measurement of Acquisition Cost 34 Discount — Discounts must be deducted from the acquisition price of the asset. Deferred payment— Assets purchased with deferred payment are valued at their cash equivalents. The difference in cash value with payment is recognized as interest expense. Exchange of assets — use fair value unless there is no economic substance or no reliable fair value. Lump sum purchase — allocate the total cost to each asset on the basis of the asset's fair value (if the assets are classified or have different useful lives).

34. Measurement of Acquisition Cost 35 Issuance of shares — using the fair value basis of the shares as an indicator of the fair value of the asset, if the value of the shares is reliable. Which is more reliable, the fair value of shares or assets? If both are reliable then the fair value of the asset given up is used to measure the asset received. Government grants — should not be recognized until it is reasonably certain that the entity meets the requirements and the grant will be obtained.

35. Asset Exchange The acquisition cost is measured at the carrying amount of the asset given up. Commercial Substance Fair value of assets exchanged The acquisition cost of a fixed asset from an exchange is measured at fair value. except: Does not have commercial substance, or The fair value of the assets received and given up cannot be measured reliably. 36

36. Measurement after Initial Recognition Entities must choose between: Cost Model Revaluation Model As its accounting policy, and Apply the policy to all fixed assets in the same group. 37

37. Measurement after Initial Recognition Cost Model Revaluation Model After being recognized as an asset, fixed assets are recorded at: Acquisition cost less Accumulated depreciation and Accumulated impairment losses on assets After being recognized as an asset, fixed assets are recorded at: The revaluation amount, which is the fair value at the revaluation date, is reduced by Accumulated depreciation and Accumulated impairment losses on assets that occurs after the revaluation date. 38

38. Fair Value The value at which an asset can be exchanged or a liability settled between knowledgeable and willing parties in an arm's length transaction. Not the amount that an entity would receive or pay in a forced transaction, forced liquidation, or distress sale. 39

39. Fair Value Determination Hierarchy Price quotes in active markets; If the market is not active, then use valuation techniques that include: use of current arm's length market transactions between knowledgeable, willing parties, where available; reference to the current fair value of another instrument that is substantially the same; discounted cash flow analysis; and option pricing model 40

40. Measurement after Initial Recognition Appraisal If there is no market that can be used as a basis for determining value due to the special nature of the asset and its infrequent trading, then Entities need to estimate fair value using the fair value approach. income or depreciated replacement cost. 41

41. Determination of Fair Value 42 The fair value of land and buildings is usually determined through an appraisal carried out by a professionally qualified appraiser based on market evidence. The fair value of plant and equipment typically uses market value determined by an appraiser.

42. No fair value 43 If there is no market on which to base fair value because of the specialized nature of the fixed asset and its infrequent sale, except as part of a continuing business, an entity may need to estimate fair value using the income approach or the depreciated replacement cost approach.

43. Frequency of Assessment 44 The frequency of revaluation depends on changes in the fair value of a fixed asset being revalued. If the fair value of the revalued asset differs materially from its recorded amount  further revaluation is necessary. Some fixed assets experience significant and fluctuating changes in fair value  need to be revalued annually. Such annual revaluations are not necessary if changes in fair value are not significant. However, these assets may need to be revalued every three or five years.

44. Measurement after Initial Recognition Revaluation Model Revaluation should be done regularly To ensure that the recorded amount does not differ materially from the fair value at the balance sheet date. Accumulated depreciation at the revaluation date is treated using the following method: proportional, or elimination. 45

45. Measurement after Initial Recognition Proportional Method Equipment worth 2,000,000 was acquired on January 1, 2010 with an economic useful life of 5 years with no residual value. On December 31, 2010 the fair value of the asset was 2,400,000. 1/1/08 Dr. Fixed assets 2,000,000 Cr. Cash 2,000,000 12/31/08 Dr. Depreciation Expense 400,000 Cr. Accumulated Depreciation 400,000 12/31/08 Dr. Fixed Assets 1,000,000 Cr. Accumulated Depreciation 200,000* Cr. Revaluation Surplus 800,000 *((2.400.000-1.600.000)/1.600.000) x 400.000 = 200.000 Example 46

46. 4. Measurement after Initial Recognition Elimination Method Equipment worth 2,000,000 was acquired on January 1, 2010 with an economic useful life of 5 years with no residual value. On December 31, 2010 the fair value of the asset was 2,400,000. Example 47 1/1/08 Fixed assets 2,000,000 Cash 2,000,000 12/31/08 Depreciation Expense 400,000 Accumulated Depreciation 400,000 12/31/08 Accumulated Depreciation 400,000 Fixed Assets 400,000 Fixed Assets 800,000 Revaluation Surplus 800,000

47. Measurement after Initial Recognition Revaluation Model If a fixed asset is revalued, then all fixed assets in the same group must be revalued If the carrying amount of an asset increases as a result of a revaluation, the increase is immediately credited to equity under the heading of revaluation surplus. Recognized in the P/L is a decrease due to previous revaluations (if any). If the carrying amount of an asset decreases as a result of a revaluation, the decrease is recognized in the income statement. Debited to equity – the amount of the revaluation surplus credit balance (if any). Entire class To Equity directly Negative to P/L 48

48. Measurement after Initial Recognition Revaluation Model The revaluation surplus presented in equity can be transferred directly to net income when the asset is retired. However, the transfer to retained earnings can be done along with the use of the asset by the entity. (partially realized) Transferred at the difference between depreciation with revaluation and depreciation with acquisition cost. (or the revaluation surplus divided by the remaining economic benefits) The transfer of revaluation surplus is not done through the Profit and Loss Report. Dr Revaluation Surplus Cr Retained Earnings 49