depresiasi, implementasi, and deplesi

11-2

C H A P T E R C H A P T E R 1111

DEPRECIATION, IMPAIRMENTS, DEPRECIATION, IMPAIRMENTS, AND DEPLETIONAND DEPLETION

Intermediate AccountingIFRS Edition

Kieso, Weygandt, and Warfield

11-3

1. Explain the concept of depreciation.

2. Identify the factors involved in the depreciation process.

3. Compare activity, straight-line, and diminishing-charge methods of depreciation.

4. Explain component depreciation.

5. Explain the accounting issues related to asset impairment.

6. Explain the accounting procedures for depletion of mineral resources.

7. Explain the accounting for revaluations.

8. Explain how to report and analyze property, plant, equipment, and mineral resources.

Learning ObjectivesLearning ObjectivesLearning ObjectivesLearning Objectives

11-4

DepreciationDepreciation

Factors Factors involvedinvolved

Methods of Methods of depreciationdepreciation

Component Component depreciationdepreciation

Special issuesSpecial issues

ImpairmentsImpairments DepletionDepletion Presentation Presentation and Analysis and Analysis

Recognizing Recognizing impairmentsimpairments

Impairment Impairment illustrationsillustrations

Reversal of Reversal of lossloss

Cash-Cash-generating generating unitsunits

Assets to be Assets to be disposed ofdisposed of

PresentationPresentation

AnalysisAnalysis

Establishing a Establishing a basebase

Write-off of Write-off of resource costresource cost

Estimating Estimating reservesreserves

Liquidating Liquidating dividendsdividends

PresentationPresentation

Depreciation, Impairments, and DepletionDepreciation, Impairments, and DepletionDepreciation, Impairments, and DepletionDepreciation, Impairments, and Depletion

RevaluationsRevaluations

RecognitionRecognition

IssuesIssues

11-5

Alokasi kos aset jangka panjang:

Aset berwujud jangka panjang = biaya depresiasi

Aset Takberwujud = biaya amortisasi

Sumber daya mineral = Biaya Deplesi

Depresiasi adl proses akuntansi untuk mengalokasikan kos aset-aset berwujud menjadi biaya (expense) secara sistimatik & rasional ke periode-periode yang mendapatkan manfaat dari penggunaan aset tersebut.

Depreciation - Method of Cost AllocationDepreciation - Method of Cost AllocationDepreciation - Method of Cost AllocationDepreciation - Method of Cost Allocation

LO 1 Explain the concept of depreciation.LO 1 Explain the concept of depreciation.

11-6


LO 2 Identify the factors involved in the depreciation process.LO 2 Identify the factors involved in the depreciation process.

Tiga pertanyaan dasar :

Faktor-faktor yang dipertimbangkan dalam proses depresiasi:

(1) Basis depresiasi apa yang akan digunakan?

(2) Berapa lama umur manfaat aset?

(3) Metode apa yang terbaik untuk mengalokasikan kos?

11-7



Basis DepresiasiIllustration 11-1

Basis depresiasi = kos mula-mula ($10.000) – Nilai residu ($1.000)

= $9.000

11-8



Estimasi Umur Manfaat/ Ekonomis

Umur manfaat umumnya berbeda dengan umur secara fisik

Aset dihentikan penggunaannya karena 2 alasan:

1. Faktor-faktor fisik (kecelakaan atau berakhirnya umur

secara fisik – aus)

2. Faktor-faktor ekonomik (tidak lagi mampu memenuhi

kebutuhan, ketinggalan teknologi, dan usang

11-9


LO 3 Compare activity, straight-line, and diminishing-LO 3 Compare activity, straight-line, and diminishing-charge methods of depreciation.charge methods of depreciation.

Profesi akuntansi mengharuskan penggunaan metode yang “sistimatik dan rasional:. Contohnya adalah:

Metode Depresiasi

(1) Activity method (units of use or production). Metode berbasis

aktivitas (unit penggunaan atau unit produksi)

(2) Straight-line method. Metode garis lurus

(3) Diminishing (accelerated)-charge methods: Metode pembebanan

dipercepat:

a) Sum-of-the-years’-digits. Jumlah angka tahun

b) Declining-balance method. Metode saldo menurun

11-10


LO 3LO 3

Activity Method Metode AktivitasIllustration 11-2

Illustration: If Stanley uses the crane for 4,000 hours the first year, the depreciation charge is:

Stanley Coal Stanley Coal Mines FactsMines Facts

Illustration 11-3

11-11


Straight-Line Method Metode Garis Lurus

Illustration: Stanley computes depreciation as follows:


Illustration 11-4

Illustration 11-2

LO 3LO 3

11-12


Diminishing-Charge Methods Metode Pembebanan Dipercepat


Sum-of-the-Years’-Digits. Each fraction uses the sum of the

years as a denominator (5 + 4 + 3 + 2 + 1 = 15). The

numerator is the number of years of estimated life remaining

as of the beginning of the year.

Illustration 11-2

n(n+1)n(n+1)

22==

5(5+1)5(5+1)

22== 1515

LO 3LO 3

Alternate sum-of-the-Alternate sum-of-the-years’ calculationyears’ calculation

11-13



Sum-of-the-Years’-Digits Jumlah Angka TahunIllustration 11-6

11-14



Declining-Balance Method. Metode Saldo Menurun

► Utilizes a depreciation rate (%) that is some multiple of the

straight-line method. Menggunakan tarif depresiasi (%) kelipatan dari tarif garis lurus

► Does not deduct the residual value in computing the

depreciation base. Nilai residual tidak diperhitungkan dalam

menentukan basis depresiasi

Diminishing-Charge Methods Metode Pembebanan Dipercepat Illustration 11-2

LO 3LO 3

11-15



Illustration 11-7

Declining-Balance Method Metode Saldo Menurun

11-16


LO 4 Explain component depreciation.LO 4 Explain component depreciation.

IFRS requires that each part of an item of property, plant,

and equipment that is significant to the total cost of the

asset must be depreciated separately. IFRS mengharuskan

komponen suatu item aset tetap yang nilainya signifikan terhadap

total kos item asetnya didepresiasi secara terpisah

Component Depreciation

11-17



Illustration: EuroAsia Airlines purchases an airplane for

€100,000,000 on January 1, 2011. The airplane has a useful

life of 20 years and a residual value of €0. EuroAsia uses the

straight-line method of depreciation for all its airplanes.

EuroAsia identifies the following components, amounts, and

useful lives.

Component Depreciation

Illustration 11-8

11-18

Computation of depreciation expense for EuroAsia for 2011.



Illustration 11-9

Depreciation Expense 8,600,000

Accumulated Depreciation—Airplane 8,600,000

Depreciation journal entry for 2011.

11-19



Special Depreciation Issues

(1) How should companies compute depreciation for

partial periods? Bagaimana seharusnya perusahaan menghitung penyusutan untuk periode passial?

(2) Does depreciation provide for the replacement of

assets? Apakah penyusutan berarti menabung untuk melakukan penggantian atas aset?

(3) How should companies handle revisions in

depreciation rates? Bagaimana seharusnya perusahaan menangani revisi tarif penyusutan

11-20



E11-5 (Depreciation Computations—Four Methods): Maserati

Corporation purchased a new machine for its assembly process on

August 1, 2010. The cost of this machine was €150,000. The

company estimated that the machine would have a salvage value of

€24,000 at the end of its service life. Its life is estimated

at 5 years and its working hours are estimated at 21,000 hours. Year-

end is December 31.

Instructions: Compute the depreciation expense for 2010 under the

following methods.

(a) Straight-line depreciation. (c) Sum-of-the-years’-digits.

(b) Activity method (d) Double-declining balance.

11-21



Current

Depreciable Annual Partial Year Accum.Year Base Years Expense Year Expense Deprec.

2010 126,000$ / 5 = 25,200$ x 5/12 = 10,500$ 10,500$

2011 126,000 / 5 = 25,200 25,200 35,700

2012 126,000 / 5 = 25,200 25,200 60,900

2013 126,000 / 5 = 25,200 25,200 86,100

2014 126,000 / 5 = 25,200 25,200 111,300

2015 126,000 / 5 = 25,200 x 7/12 = 14,700 126,000

126,000$

J ournal entry:

2010 Depreciation expense 10,500

Accumultated depreciation 10,500

Straight-line Method

11-22

($126,000 / 21,000 hours = $6 per hour)(Given) Current

Hours Rate per Annual Partial Year Accum.Year Used Hours Expense Year Expense Deprec.

2010 800 x $6 = 4,800$ 4,800$ 4,800$

2011 x =

2012 x =

2013 x =

2014 x =

800 4,800$

J ournal entry:




LO 3LO 3

Activity Method (Assume 800 hours used in 2010)(Assume 800 hours used in 2010)

11-23


Sum-of-the-Years’-Digits MethodCurrent

Depreciable Annual Partial Year Accum.Year Base Years Expense Year Expense Deprec.

2010 126,000$ x 5/15 = 42,000 x 5/12 17,500$ 17,500$

2011 126,000 x 4.58/15 = 38,500 38,500 56,000

2012 126,000 x 3.58/15 = 30,100 30,100 86,100

2013 126,000 x 2.58/15 = 21,700 21,700 107,800

2014 126,000 x 1.58/15 = 13,300 13,300 121,100

2015 126,000 x .58/15 = 4,900 4,900 126,000

126,000$

J ournal entry:


Accumultated depreciation 17,500 LO 3LO 3

5/12 = .4166677/12 = .583333

11-24


Double-Declining Balance MethodCurrent

Depreciable Rate Annual Partial YearYear Base per Year Expense Year Expense

2010 150,000$ x 40% = 60,000$ x 5/12 = 25,000$

2011 125,000 x 40% = 50,000 50,000

2012 75,000 x 40% = 30,000 30,000

2013 45,000 x 40% = 18,000 18,000

2014 27,000 x 40% = 10,800 Plug 3,000

126,000$

J ournal entry:



LO 3LO 3

11-25

Depreciation and Replacement of PP&E Depresiasi dan Penggantian Aset Tetap



Depreciation

► Does not involve a current cash outflow. Depresiasi tidak menggambarkan arus kas masa kini

► Funds for the replacement of the assets come from

the revenues. Pembiayaan untuk penggantian aset tetap berasal dari pendapatan

11-26

Accounted for in the current and prospective periods.

Dicatat pada periode sekarang & periode-periode selanjutnya (prospektif)

Not handled retrospectively Tidak diperlakukan secara retrospektif

Not considered errors or extraordinary items Tidak dianggap kesalahan atau pos luar biasa



Revision of Depreciation Rates Perubahan atas Tarif Depresiasi

11-27

Arcadia HS, purchased equipment for $510,000 which was Arcadia HS, purchased equipment for $510,000 which was

estimated to have a useful life of 10 years with a residual value estimated to have a useful life of 10 years with a residual value

of $10,000 at the end of that time. Depreciation has been of $10,000 at the end of that time. Depreciation has been

recorded for 7 years on a straight-line basis. In 2010 (year 8), it recorded for 7 years on a straight-line basis. In 2010 (year 8), it

is determined that the total estimated life should be 15 years is determined that the total estimated life should be 15 years

with a residual value of $5,000 at the end of that time.with a residual value of $5,000 at the end of that time.

Questions:Questions:

What is the journal entry to correct What is the journal entry to correct

the prior years’ depreciation?the prior years’ depreciation?

Calculate the depreciation expense Calculate the depreciation expense

for 2010.for 2010.

No Entry No Entry RequiredRequired

Change in Estimate ExampleChange in Estimate ExampleChange in Estimate ExampleChange in Estimate Example


11-28

EquipmentEquipment $510,000$510,000

Accumulated depreciationAccumulated depreciation 350,000350,000

Net book value (NBV)Net book value (NBV) $160,000$160,000

Balance SheetBalance Sheet (Dec. 31, 2009)(Dec. 31, 2009)

Change in Estimate ExampleChange in Estimate ExampleChange in Estimate ExampleChange in Estimate Example After 7 yearsAfter 7 years

Equipment cost Equipment cost $510,000$510,000

Salvage valueSalvage value - 10,000 - 10,000

Depreciable baseDepreciable base 500,000500,000

Useful life (original)Useful life (original) 10 years 10 years

Annual depreciationAnnual depreciation $ 50,000 $ 50,000 x 7 years = x 7 years = $350,000$350,000

First, establish NBV First, establish NBV at date of change in at date of change in

estimate.estimate.

First, establish NBV First, establish NBV at date of change in at date of change in

estimate.estimate.


11-29

Change in Estimate ExampleChange in Estimate ExampleChange in Estimate ExampleChange in Estimate Example After 7 yearsAfter 7 years

Net book value Net book value $160,000$160,000

Salvage value (new) Salvage value (new) 5,0005,000

Depreciable baseDepreciable base 155,000155,000

Useful life remainingUseful life remaining 8 years 8 years

Annual depreciationAnnual depreciation $ 19,375$ 19,375

Depreciation Depreciation Expense calculation Expense calculation

for 2010.for 2010.

Depreciation Depreciation Expense calculation Expense calculation

for 2010.for 2010.

Depreciation expense 19,375

Accumulated depreciation 19,375

Journal entry for 2010


11-30

ImpairmentsImpairmentsImpairmentsImpairments

LO 5 Explain the accounting issues related to asset impairment.LO 5 Explain the accounting issues related to asset impairment.

A long-lived tangible asset is impaired when a company is not able

to recover the asset’s carrying amount either through using it or by

selling it. Aset berwujud jangka panjang mengalami impairments (penurunan nilai), jika kemampuannya untuk menghasilkan kas telah berkurang, baik dengan menggunakannya ataupun dengan menjualnya

Recognizing Impairments Mengakui Impairments (penurunan nilai)

On an annual basis, companies review the asset for indicators of

impairments—that is, a decline in the asset’s cash-generating ability

through use or sale. Setiap tahun, adanya indikator impairments (penurunan nilai) harus direview – apakah kemampuan aset untuk menghasilkan kas, baik dengan menggunakan ataupun menjualnya, lebih rendah dari jumlah bawaan/ tercatatnya.

11-31


LO 5LO 5

If impairment indicators are present, then an impairment test

must be conducted.

Recognizing Impairments

Illustration 11-15

11-32


LO 5LO 5

Example: Assume that Cruz Company performs an impairment

test for its equipment. The carrying amount of Cruz’s equipment is

$200,000, its fair value less costs to sell is $180,000, and its

value-in-use is $205,000.Illustration 11-15

$200,000 $205,000

$180,000 $205,000

No Impairment

11-33


LO 5LO 5

Example: Assume the same information for Cruz Company

except that the value-in-use of Cruz’s equipment is $175,000

rather than $205,000.

Illustration 11-15

$200,000 $180,000

$180,000 $175,000

$20,000 Impairment Loss

11-34


LO 5LO 5

Example: Assume the same information for Cruz Company

except that the value-in-use of Cruz’s equipment is $175,000

rather than $205,000.

Illustration 11-15

$200,000 $180,000

Cruz makes the following entry to record the impairment loss.

Loss on Impairment 20,000

Accumulated Depreciation—Equipment20,000


11-35


LO 5LO 5

At December 31, 2011, Hanoi Company has equipment with a cost of

VND26,000,000, and accumulated depreciation of VND12,000,000. The

equipment has a total useful life of four years with a residual value of

VND2,000,000. The following information relates to this equipment.

1. The equipment’s carrying amount at December 31, 2011, is

VND14,000,000 (VND26,000,000 VND12,000,000).

2. Hanoi uses straight-line depreciation. Depreciation was VND6,000,000

for 2011 and is recorded.

3. Hanoi has determined that the recoverable amount for this asset at

December 31, 2011, is VND11,000,000.

4. The remaining useful life after December 31, 2011, is two years.

Impairments Illustrations Case 1

11-36

Case 1: Hanoi records the impairment on its equipment at

December 31, 2011, as follows.


LO 5LO 5

Illustration 11-15

VND14,000,000 VND11,000,000

VND3,000,000 Impairment Loss

Loss on Impairment 3,000,000

Accumulated Depreciation—Equipment3,000,000

11-37


LO 5LO 5

Depreciation Expense 5,500,000

Accumulated Depreciation—Equipment5,500,000

Equipment

VND 26,000,000

Less: Accumulated Depreciation-Equipment

15,000,000

Carrying value (Dec. 31, 2011)

VND 11,000,000

Hanoi Company determines that the equipment’s total useful life has

not changed (remaining useful life is still two years). However, the

estimated residual value of the equipment is now zero. Hanoi

continues to use straight-line depreciation and makes the following

journal entry to record depreciation for 2012.

11-38


LO 5LO 5

At the end of 2010, Verma Company tests a machine for impairment. The

machine has a carrying amount of $200,000. It has an estimated remaining

useful life of five years. Because there is little market-related information on

which to base a recoverable amount based on fair value, Verma determines

the machine’s recoverable amount should be based on value-in-use. Verma

uses a discount rate of 8 percent. Verma’s analysis indicates that its future

cash flows will be $40,000 each year for five years, and it will receive a

residual value of $10,000 at the end of the five years. It is assumed that all

cash flows occur at the end of the year.

Impairments Illustrations Case 2

Illustration 11-16

11-39

Case 2: Computation of the impairment loss on the machine at

the end of 2010.


LO 5LO 5

Illustration 11-15

$200,000 $166,514

Unknown $166,514


11-40

Case 2: Computation of the impairment loss on the machine at

the end of 2010.


LO 5LO 5

Illustration 11-15

$200,000 $166,514

Unknown $166,514



Accumulated Depreciation—Machine33,486

11-41


LO 5LO 5

Illustration: Tan Company purchases equipment on January 1,

2010, for $300,000, useful life of three years, and no residual value.

Reversal of Impairment Loss

At December 31, 2010, Tan records an impairment loss of $20,000.


Accumulated Depreciation—Equipment20,000

11-42


LO 5LO 5

Depreciation expense and related carrying amount after the

impairment.

Reversal of Impairment Loss

At the end of 2011, Tan determines that the recoverable amount of

the equipment is $96,000. Tan reverses the impairment loss.

Accumulated Depreciation—Equipment 6,000

Recovery of Impairment Loss 6,000

11-43


When it is not possible to assess a single asset for impairment

because the single asset generates cash flows only in

combination with other assets, companies identify the smallest

group of assets that can be identified that generate cash flows

independently of the cash flows from other assets. Jika menetapkan penurunan nilai aset untuk satu aset tunggal, tidak mungkin dilakukan, karena aset tunggal tersebut menghasilkan arus kas secara bersama-sama dengan aset-aset lainnya, perusahaan harus mengidentifikasi kelompok aset terkecil yang arus kasnya sapat diidentifikasi secara terpisah dari arus kas yang dihasilkan oleh aset-aset lainnya

Cash-Generating Units Unit Penghasil Kas


11-44


Report the impaired asset at the lower-of-cost-or-net realizable value (fair value less costs to sell). Laporkan aset yang mengalami penurunan nilai dengan dasar yang lebih rendah, kos atau nilai realisasi neto (nilai wajar dikurangi kos-kos untuk menjualnya.

No depreciation or amortization is taken on assets held for disposal during the period they are held. Tidak perlu dilakukan depresiasi atau amortisasi untuk aset-aset yang akan segera dilepaskan selama periode aset-aset itu masih ada (belum dilepaskan)

Can write up or down an asset held for disposal in future periods, as long as the carrying amount after the write up never exceeds the carrying amount of the asset before the impairment. Aset-aset akan dilepaskan dapat dinaikan atau diturunkan dalam periode-periode selanjutnya, sejauh jumlah bawaannya tidak melebihi jumlah bawaaan aset sebelum mengalami penurunan nilai

Impairment of Assets to Be Disposed Of Penurunan Nilai Aset Yang Akan Dilepaskan


11-45


LO 5LO 5

Illustration 11-18Graphic of Accounting for Impairments

11-46

Natural resources can be divided into two categories:

1. Biological assets (timberlands)

► Fair value approach (chapter 9) Pendekatan nilai wajar

2. Mineral resources (oil, gas, and mineral mining).

► Complete removal (consumption) of the asset. Asetnya secara fisik berkurang ketika dikonsumsi atau digunakan

► Replacement of the asset only by an act of nature. Penggantian aset hanya dilakukan oleh alam sendiri

DepletionDepletionDepletionDepletion

LO 6 Explain the accounting procedures for depletion of mineral resources.LO 6 Explain the accounting procedures for depletion of mineral resources.

Depletion - process of allocating the cost of mineral resources. Kos sumber daya mineral di Neraca dilaporkan sebagai aset ; Deplesi-

proses pengalokasian kos sumber daya mineral

11-47

Establishing a Depletion Base Menetapkan Basis Deplesi



Computation of the depletion base involves: Basis deplesi ditetapkan dengan memperhitungkan:

(1) Pre-exploratory costs. Kos-kos pra-eksplorasi

(2) Exploratory and evaluation costs. Kos-kos eksplorasi & evaluasi

(3) Development costs. Kos-kos pengembangan

11-48

Write-off of Resource Cost



Normally, companies compute depletion on a units-of-production method (activity approach). Depletion is a function of the number of units extracted during the period. Perusahaan menghitung deplesi dengan metode unit produksi (pendekatan aktivitas). Deplesi adalah fungsi dari jumlah unit yang diestrak selama periode

Calculation:

Total cost – Residual valueTotal cost – Residual value

Total estimated units availableTotal estimated units available= Depletion cost per unit= Depletion cost per unit

Units extracted x Cost per unitUnits extracted x Cost per unit = Depletion= Depletion

11-49

Illustration: MaClede Co. acquired the right to use 1,000

acres of land in South Africa to mine for silver. The lease cost

is $50,000, and the related exploration costs on the property

are $100,000. Intangible development costs incurred in

opening the mine are $850,000. MaClede estimates that the

mine will provide approximately 100,000 ounces of silver.



Illustration 11-18

11-50

If MaClede extracts 25,000 ounces in the first year, then the

depletion for the year is $250,000 (25,000 ounces x $10).


LO 6LO 6

Inventory 250,000

Accumulated Depletion 250,000

MaClede’s statement of financial position:

Depletion cost related to inventory sold is part of cost of goods sold.

11-51

Estimating Recoverable Reserves Mengestimasi Cadangan yang Dapat Diperoleh



Same as accounting for changes in estimates. Sama

dengan perlakuan akuntansi untuk perubahan estimasi

Revise the depletion rate on a prospective basis. Revisi

tarif deplesi secara prospektif

Divides the remaining cost by the new estimate of the

recoverable reserves. Bagi kos yang tersisa dengan

estimasi cadangan yang baru

11-52

Liquidating Dividends - Dividends greater than the amount of accumulated net income.



Illustration: Callahan Mining had a retained earnings balance

of £1,650,000, accumulated depletion on mineral properties of

£2,100,000, and share premium of £5,435,493. Callahan’s board

declared a dividend of £3 a share on the 1,000,000 shares

outstanding. It records the £3,000,000 cash dividend as follows.

Retained Earnings 1,650,000

Share Premium—Ordinary 1,350,000

Cash

3,000,000

11-53

Presentation on the Financial Statements Penuajian pada Laporan Keuangan



Disclosures related to E&E expenditures should include: Pengeluaran-pengeluaran dalam rangka eksplorasi dan evaluasi harus diungkapkan mencakup:

1. Accounting policies for exploration and evaluation expenditures, including the recognition of E&E assets. Kebijakan akuntansi terkait pengeluaran eksplorasi & evaluasi, termasuk pengakuan aset-aset eksplorasi & evaluasi

2. Amounts of assets, liabilities, income and expense, and operating cash flow arising from the exploration for and evaluation of mineral resources. Jumlah aset, kewajiban, penghasilan dan biaya, serta arus kas operasi yang berasal dari eksplorasi dan evaluasi sumber daya mineral

11-54

Companies may value long-lived tangible asset after acquisition at cost or fair

value. Setelah pemerolehan, aset-aset berwujud jangka panjang bisa dinilai dengan dasar kos atau

nilai wajar

Network Rail (GBR) elected to use fair values to account for its railroad network.

Network Rail (GBR) memilih untuk menggunakan nilai wajar dalam memperlakukan jejaring rel kereta

api yang dimilikinya

► Increased long-lived tangible assets by £4,289 million. Meningkatkan aset

berwujud jangka panjang hingga £4,289

► Change in the fair value accounted for by adjusting the asset account and

establishing an unrealized gain. Perubahan nilai wajar diperlakukan dengan cara

menyesuaikan akun aset dan mengakui untung yang tidak direalisasi

► Unrealized gain is often referred to as revaluation surplus. Untung yang tidak

direalisasi juga bisa disebut surplus revaluasi

RevaluationsRevaluationsRevaluationsRevaluations

LO 7 Explain the accounting for revaluations.LO 7 Explain the accounting for revaluations.

Recognizing Revaluations Pengakuan Revaluasi

11-55

Revaluation—Land


Illustration: Siemens Group (DEU) purchased land for €1,000,000 on January 5, 2010. The company elects to use revaluation accounting for the land in subsequent periods. At December 31, 2010, the land’s fair value is €1,200,000. The entry to record the land at fair value is as follows.


Land 200,000

Unrealized Gain on Revaluation - Land

200,000

Unrealized Gain on Revaluation—Land increases other comprehensive income in the statement of comprehensive income.

11-56

Revaluation—Depreciable Assets

Illustration: Lenovo Group (CHN) purchases equipment for ¥500,000 on January 2, 2010. The equipment has a useful life of five years, is depreciated using the straight-line method of depreciation, and its residual value is zero. Lenovo chooses to revalue its equipment to fair value over the life of the equipment. Lenovo records depreciation expense of ¥100,000 (¥500,000 5) at December 31, 2010, as follows.



Depreciation Expense 100,000

Accumulated Depreciation—Equipment

100,000

11-57


After this entry, Lenovo’s equipment has a carrying amount of

¥400,000 (¥500,000 - ¥100,000). Lenovo receives an

independent appraisal for the fair value of equipment at

December 31, 2010, which is ¥460,000.



Accumulated Depreciation—Equipment 100,000

Equipment

40,000

Unrealized Gain on Revaluation—Equipment

60,000

11-58




Illustration 11-22Financial StatementPresentation—Revaluations

Lenovo reports depreciation expense of ¥100,000. The Accumulated Other

Comprehensive Income account related to revaluations cannot have a negative

balance.

11-59

Company can select to value only one class of assets, say buildings, and not revalue other assets such as land or equipment. Perusahaan bisa memilih untuk hanya merevaluasi satu kelompok aset, misalnya bangunan, sementara tidak merevaluasi kelompok aset lainnya misalnya tanah & peralatan.

Most companies do not use revaluation accounting. Banyaj perusahaan tidak menggunakan akuntansi revaluasi

► Substantial and continuing costs associated with appraisals. Kos penilaian aset cukup besar & akan terjadi terus-meneru

► Gains associated with revaluations above historical cost are not reported in net income but rather go directly to equity. Untung yang terkait dengan revaluasi yang lebih besar dari kos historis tidak dilaporkan di laba bersih tetapi dibawa langsung ke ekuitas

► Losses associated with revaluation below historical cost decrease net income. In addition, the higher depreciation charges related to the revalued assets also reduce net income. Rugi yang terkait revaluasi yang lebih rendah dari kos historis akan menurunkan laba bersih. Di samping itu, biaya depresiasi yang lebih besar terkait aset-aset yang direvaluasi juga akan mengurangi laba bersih



Revaluations Issues Masalah-masalah terkait Revaluasi

11-60

Presentation of Property, Plant, Equipment, and Mineral Resources Penyajian aset tetap & sumber daya mineral

Presentation and AnalysisPresentation and AnalysisPresentation and AnalysisPresentation and Analysis

Basis of valuation (usually cost) Basis penilaian (biasanya kos)Pledges, liens, and other commitments Agunan, hak gadai, dan komitmen-komitmen lainnya terkait aset

Depreciating assets, use Accumulated Depreciation. Dalam mendepresiasi aset, gunakan akumulasi depresiasi

Depleting assets may include use of Accumulated Depletion account, or the direct reduction of asset. Dalam mendeplesi aset, akun akumulasi deplesi bisa digunakan, atau langsung dikurangkan terhadap asetnya

DisclosuresDisclosures

LO 8 Explain how to report and analyze property, LO 8 Explain how to report and analyze property, plant, equipment, and mineral resources.plant, equipment, and mineral resources.

11-61

Measure of a firm’s ability to Measure of a firm’s ability to

generate sales from a generate sales from a

particular investment in assets. particular investment in assets.

Mengukur kemampuan Mengukur kemampuan perusahaan untuk menciptakan perusahaan untuk menciptakan penjualan dari investasi khusus penjualan dari investasi khusus

dalam asetdalam aset


Illustration 11-24

LO 8LO 8

Analysis of Property, Plant, and Equipment

Asset Turnover Ratio Ratio Perputaran Aset

11-62

Measure of the ability to Measure of the ability to

generate operating income generate operating income

from a particular level of from a particular level of

sales. sales. Mengukur kemampuan Mengukur kemampuan untuk menghasilkan laba operasi untuk menghasilkan laba operasi

dari tingkat penjualan tertentudari tingkat penjualan tertentu


Illustration 11-25

LO 8LO 8


Profit Margin on SalesMargin Laba atas Penjualan

11-63

Measures a firm’s success Measures a firm’s success

in using assets to generate in using assets to generate

earnings. earnings. Mengukur Mengukur keberhasilan perusahaan dalam keberhasilan perusahaan dalam

menggunakan aset untuk menggunakan aset untuk menghasilkan labamenghasilkan laba


Illustration 11-26

LO 8LO 8


Rate of Return on AssetsTingkat Imbal Hasil Aset

11-64

Analyst obtains further insight into the behavior of ROA by disaggregating it into components of profit margin on sales and asset turnover as follows: Analis juga akan memperoleh wawasan lebih jauh Analis juga akan memperoleh wawasan lebih jauh mengenai perilaku ROA dengan memiih komponen-komponennya, yaitu margin laba mengenai perilaku ROA dengan memiih komponen-komponennya, yaitu margin laba terhadap penjualan & perputaran asetterhadap penjualan & perputaran aset

Net Income

Average Total Assets

Rate of Return on Assets

=

Net Income

Net Sales

Profit Margin on Sales

=

Net Sales

Asset Turnover x

x

Average Total Assets



11-65

€644

(€9,533 €8,325) / 2

Rate of Return on Assets

=

€644

€10,799

Profit Margin on Sales

=

€10,799

Asset Turnover x

x


7.2% 5.96% =

x 1.21

(€9,533 €8,325) / 2

Analyst obtains further insight into the behavior of ROA by disaggregating it into components of profit margin on sales and asset turnover as follows: Analis juga akan memperoleh wawasan lebih jauh Analis juga akan memperoleh wawasan lebih jauh mengenai perilaku ROA dengan memilah komponen-komponennya, yaitu margin laba mengenai perilaku ROA dengan memilah komponen-komponennya, yaitu margin laba terhadap penjualan & perputaran asetterhadap penjualan & perputaran aset


11-66

Under both iGAAP and U.S. GAAP, interest costs incurred during construction must be capitalized. Dalam kedua standar, kos bunga yang terjadi selama pembangunan harus dikapitalisasi

The accounting for exchanges of non-monetary assets has recently converged between IFRS and U.S. GAAP. U.S. GAAP now requires that gains on exchanges of non-monetary assets be recognized if the exchange has commercial substance. This is the same framework used in IFRS. Perlakuan akuntansi untuk pertukaran aset nonmoneter akhirnya mengalami konvergensi antara IFRS dengan GAAP. GAAP sekarang mengharuskan untung atas pertukaran aset nonmoneter diakui jika pertukarannya memiliki substansi komersial. Rerangka yang sama juga digunakan dalam IFRS

11-67

U.S. GAAP also views depreciation as allocation of cost over an asset’s life. U.S. GAAP permits the same depreciation methods (straight-line, diminishing-balance, units-of-production) as IFRS. GAAP juga memandang depresiasi sebagai pengalokasian kos selama umur aset. GAAP memperbolehkan metode-metode depresiasi yang sama dengan IFRS (garis lurus, saldo menurun, unit produksi)

IFRS requires component depreciation. Under U.S. GAAP, component depreciation is permitted but is rarely used. IFRS mengharuskan dilakukan depresiasi komponen. Dalam GAAP, depresiasi komponen diperbolehkan tapi jarang digunakan

11-68

Under IFRS, companies can use either the historical cost model or the revaluation model. U.S. GAAP does not permit revaluations of property, plant, and equipment or mineral resources. Dalam IFRS, perusahaan bisa memilih model kos historis atau model revaluasi. GAAP tidak memperbolehkan revaluasi aset tetap ataupun sumber daya mineral

In testing for impairments of long-lived assets, U.S. GAAP uses a two-step model to test for impairments. The IFRS impairment test is stricter. However, unlike U.S. GAAP, reversals of impairment losses are permitted. Dalam menguji penurunan nilai aset jangka panjang, GAAP menggunakan model dua tahap. Sejauh future undiscounted cash flows lebih besar

11-69 LO 9 Explain revaluation accounting procedures.LO 9 Explain revaluation accounting procedures.

The general rules for revaluation accounting are as follows.

1. When a company revalues its long-lived tangible assets above

historical cost, it reports an unrealized gain that increases other

comprehensive income. Thus, the unrealized gain bypasses

net income, increases other comprehensive income, and

increases accumulated other comprehensive income.

2. If a company experiences a loss on impairment (decrease of

value below historical cost), the loss reduces income and

retained earnings. Thus, gains on revaluation increase equity

but not net income, whereas losses decrease income and

retained earnings (and therefore equity).

11-70 LO 9 Explain revaluation accounting procedures.LO 9 Explain revaluation accounting procedures.

3. If a revaluation increase reverses a decrease that was

previously reported as an impairment loss, a company credits

the revaluation increase to income using the account Recovery

of Impairment Loss up to the amount of the prior loss. Any

additional valuation increase above historical cost increases

other comprehensive income and is credited to Unrealized Gain

on Revaluation.

4. If a revaluation decrease reverses an increase that was

reported as an unrealized gain, a company first reduces other

comprehensive income by eliminating the unrealized gain. Any

additional valuation decrease reduces net income and is

reported as a loss on impairment.

11-71

Revaluation of LandRevaluation of LandRevaluation of LandRevaluation of Land

LO 9LO 9

Revaluation—2010: Valuation Increase

Illustration: Unilever Group (GBR and NLD) purchased land on January 1, 2010, that cost €400,000. Unilever decides to report the land at fair value in subsequent periods. At December 31, 2010, an appraisal of the land indicates that its fair value is €520,000. Unilever makes the following entry to record the increase in fair value.

Land 120,000

Unrealized Gain on Revaluation—Land

120,000Illustration 11A-1

11-72


LO 9LO 9

Revaluation—2011: Decrease below Cost

Illustration: What happens if the land’s fair value at December 31, 2011, is €380,000, a decrease of €140,000 (€520,000 - €380,000)?Unrealized Gain on Revaluation—Land 120,000


Land


11-73


LO 9LO 9

Revaluation—2012: Recovery of Loss

Illustration: At December 31, 2012, Unilever’s land value increases to €415,000, an increase of €35,000 (€415,000 - €380,000).

Land 35,000

Unrealized Gain on Revaluation—Land

15,000

Recovery of Impairment Loss


11-74

Copyright © 2011 John Wiley & Sons, Inc. All rights reserved.

Reproduction or translation of this work beyond that permitted in

Section 117 of the 1976 United States Copyright Act without the

express written permission of the copyright owner is unlawful.

Request for further information should be addressed to the

Permissions Department, John Wiley & Sons, Inc. The purchaser

may make back-up copies for his/her own use only and not for

distribution or resale. The Publisher assumes no responsibility for

errors, omissions, or damages, caused by the use of these

programs or from the use of the information contained herein.

CopyrightCopyrightCopyrightCopyright

depresiasi, implementasi, and deplesi

Education

depreciation process

concept of depreciation

basis depresiasi illustration

aset berwujud jangka

biaya deplesi depresiasi

accounting issues

kos mulamula

depletion of mineral