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 (continued)
l. Capitalization of borrowing costs
In accordance with PSAK No. 26 (Revised 1997) on “Borrowing Costs”, borrowing costs are
generally expensed as incurred. Borrowing costs are capitalized if they are directly attributable to
the acquisition, construction or production of a qualifying asset. Capitalization of borrowing costs
commences when the activities to prepare the asset for its intended use or sale are in progress
and the expenditures and borrowing costs are being incurred. Borrowing costs are capitalized until
the assets are ready for their intended use. If the resulting carrying amount of the asset exceeds
its recoverable amount or net realizable value, an impairment loss is recognized.
m. Impairment of non-financial asset value
The recoverable amount of an asset is estimated whenever events or changes in circumstances
indicate that its carrying amount may not be fully recoverable. Impairment in asset value, if any, is
recognized as loss in the current year’s consolidated statement of income.
n. Stock issuance costs
Costs incurred in connection with the issuance of capital stock are presented as a deduction from
additional paid-in-capital.
o. Revenue and expense recognition
Revenues from real estate sales are recognized in accordance with PSAK No. 44 on “Accounting
for Real Estate Activities” as follows:
(i) Revenues from sales of houses, shop houses and other similar property and related land are
recognized under the full accrual method if all of the following conditions are met:
1. A sale is consummated.
2. The selling price is collectible.
3. The seller’s receivable is not subject to future subordinated to other loan 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 lots 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 in the
future.
4. The land development process is complete so that the seller has no further obligations
related to the lots sold.
5. Only the lots are sold, without any requirement of the seller’s involvement in the
construction of the building on the lots.
15