PT Summarecon Agung Tbk | Laporan Tahunan 2010 Annual Report

These consolidated financial statements are originally issued in Indonesian language.
PT SUMMARECON AGUNG Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2010 and 2009
(Expressed in thousands of rupiah, unless otherwise stated)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies adopted by the Company and Subsidiaries conform to generally
accepted accounting principles in Indonesia. The significant accounting principles applied consistently
in the preparation of the consolidated financial statements for the years ended December 31, 2010 and
2009 are as follows:
a. Basis of preparation of the consolidated financial statements
The consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in Indonesia, which are based on Statements of Financial Accounting
Standards (PSAK) and Capital Market and Financial Institution Supervisory Agency (BAPEPAM
and LK) regulation No. VIII.G.7 (Revised 2000) concerning “Guidelines for Presentation of
Financial Statements” and circular letter No. SE-02/PM/2002 dated December 27, 2002 of the
Chairman of BAPEPAM and LK concerning “Guidelines for Financial Statement Presentation and
Disclosures for Publicly-listed Companies Engaged in the Real Estate Industry”.
The consolidated financial statements have been prepared on the accrual basis using the historical
cost concept of accounting, except for certain short-term investments and derivative instruments
which are stated at fair value, inventories which are stated at the lower of cost or net realizable
value, certain investments in shares of stock which are accounted for using the equity method and
financial instruments which are valued at fair value.
The consolidated statements of cash flows classify cash flows into operating, investing and
financing activities. The cash flows from operating activities are presented using the direct method.
The reporting currency used in the preparation of the consolidated financial statements is the
Indonesian rupiah (Rp).
b. Principles of consolidation
The consolidated financial statements include the accounts of the Company and Subsidiaries
whose shares are owned more than 50% by the Company, directly or indirectly; the joint operation
(Kerja Sama Operasi), known as KSO Summarecon Serpong, between SCK and JBC; and the
KSO Summarecon Lakeview among SCK, PT Telaga Gading Serpong (TGS) and PT Lestari
Kreasi (LK).
In accordance with PSAK No. 12, “Financial Reporting of Interests in Jointly Controlled Operations
and Assets”, SCK’s participation in the joint operation has been accounted for in the consolidated
financial statements using the proportionate consolidation method. In applying the proportionate
consolidation method, the venturer combines its proportionate share in the assets and liabilities of
the joint venture, and its interests in the joint venture revenues and expenses with the related
accounts in the consolidated financial statements.
All significant intercompany accounts and transactions have been eliminated.
The proportionate share of the minority stockholders in the equity of the Subsidiaries is reflected as
“Minority Interests in Net Assets of Consolidated Subsidiaries” in the consolidated balance sheets.
When cumulative losses applicable to minority interests exceed the minority stockholders’ interests
in the Subsidiaries’ capital stock, the loss in excess of the minority stockholders’ interest is charged
against the majority stockholder’s interest and is not reflected as an asset, except when minority
stockholders have a binding obligation to cover such losses and the minority stockholders can fulfill
their obligation. Subsequent profits earned by the Subsidiaries that are applicable to the minority
interests shall be first allocated to the majority interest to the extent of the losses applicable to the
minority interests which were previously absorbed by such majority interest.
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