MOJAKOE AKUNTANSI KEUANGAN 1 - SPA – FEBUI · Presented(by(:(Accounting(Study(Division( (...

Presented by : Accounting Study Division MoJaKoe Akuntansi Keuangan 1

Semester Gasal 2013/2014

MOJAKOE AKUNTANSI KEUANGAN 1

UAS AK1 2012/2013 ACCOUNTING STUDY DIVISION

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FINAL EXAM FINANCIAL ACCOUNTING 1 Thursday, 20 December 2012

Question 1 (20%) PT Jaya acquired equipment on January 1, 2009, for Rp 540 mio. PT Jaya elects to value this class of equipment using revaluation accounting. This equipment is being depreciated on a straight-‐line basis over its 6-‐year useful life. There is no residual value at the end of the 6-‐year period. The appraised value of the equipment approximates the carrying amount at December 31, 2009. On December 31, 2010 and December 31, 2011, the fair value of the equipment is determined to be Rp 440 mio and Rp 240 mio. Assume the estimated useful life and residual value does not change during the 6 year period. Instructions

1. Prepare the journal entries for 2009, 2010 and 2011 related to the equipment ! (10%) 2. Determine the amounts to be reported by PT Jaya at December 31, 2010 and 2011, as

Equipment, Other Comprehensive Income, Depreciation Expense, Impairment Loss, and Accumulated other Comprehensive income (5%)

3. Prepare the entries for the sale of the equipment by PT Jaya on June 30, 2012, for Rp 200 mio! (5%)

Question 2 (15%) Answer each of the following cases briefly!

(a) PT XYZ has four properties in Indonesia and overseas and uses them to earn rental. Except for Property D, which is owned by PT XYZ, Properties A and B are held by PT XYZ under finance leases while Property C is held under operating lease. Evaluate the accounting implication of IAS 40/PSAK 13 about Investment Property on PT XYZ’s properties! (3%)

(b) PT Hotel Cahaya treats its hotel properties as investment properties. The hotel is owned and managed by PT Hotel Cahaya. Evaluate the accounting treatment on PT Hotel Cahaya’s hotel properties! (3%)

(c) PT LMN has adopted IAS 40/PSAK 13 and stated its investment properties at fair value even though the properties are held under operating leases. On February 28, 2012, Freehold Property C, stated at revalued amount of Rp500.000.000 (originally used its own office), was leased out to derive rental income. Revaluation surplus recognized for C was Rp100.000.000, while C’s fair value at the date of lease commencement is Rp550.000.000. Advise PT LMN in the accounting treatments on Freehold Property C! (3%)



(d) Nirmala Resort Limited, a resort operator, is committed to a plan to sell its existing resort and has initiated actions to locate a buyer. It has two plans on hand as follows: a. Nirmala Resort will continue to use the resort and will not transfer it to buyer until

construction of a new resort is completed. b. Nirmala Resort will transfer the resort to the buyer after it vacates the resort. The

time necessary to vacate the resort is usual and customary for sales of similar assets.

Evaluate whether the two plans can meet the criteria in IFRS 5/PSAK 58 to be available for immediate sale! (6%)

Question 3 (15%)

On 1 January 2009, PT Persada Nusantara (“Persada”) acquired a trademark for a line of products in a separate acquisition, from a competitor for IDR500,000. Persada expected to continue marketing the line of products indefinitely. An analysis of (i) product life cycle studies, (ii) market, competitive and environmental trends, and (iii) brand extension opportunities provides evidence that the line of trademarked products may generate net cash inflows for the acquiring entity for an indefinite period.

In 2012, a competitor unexpectedly revealed a technological breakthrough that is expected to result in a product, that when launched by the competitor, will extinguish demand for Persada’s patented product-‐line. Demand for Persada’s patented product-‐line is expected to remain strong until December 2015, when the competitor is expected to launch its new product.

On 31 December 2012, Persada assessed the recoverable amount of the trademark at IDR150,000. Persada intends to continue manufacturing the patented products until 31 December 2015. Persada has a 31 December financial year-‐end.

Prepare accounting entries to record the information set out above in the accounting records f Persada from 1 January 2009 to 31 December 2013, including initial recognition, amortization expense and impairment loss (if any).

Ignore all forms of taxation.

Question 4 (15%)

On April 1, 2012, Venus Company paid Rp3,500,000 to acquire all of the common stock of Mars Corporation, which become a division of Venus.



Mars reported the following statement of financial position at the time of the acquisition:

1 Apr-‐12 31-‐Dec-‐12 Accounts Book Value Book Value Cash 309.145 166.900 AR 425.210 120.000 AFDA (21.280) (8.000) Inventory 310.780 85.000 Prepaid Expenses 180.420 70.000 Land 900.000 1.125.000 Building 750.000 656.250 Accum. Depreciation—Building

(225.000) (43.750)

Equipment 620.400 620.400 Accum. Depreciation—Equipment

(124.080) (206.800)

Goodwill -‐ A AP (218.360) (205.000) Bank Payable (240.000) (180.000)

It was determined at the date of the purchase that the fair value of the identifiable net assets of Mars was as follows:

- Current assets, except cash = 50% of book value - Non-‐current assets = 125% of book value - Liabilities and cash = 100% of book value

At December 31, 2012 , it was determined that the recoverable amount value of the Mars division is Rp3.100.000.

Instructions

a. Compute the amount of goodwill recognized. If any, on April 1, 2012 and prepare the journal entry for Venus. (5 points)

b. Determine the impairment loss, if any, to be recorded on December 31, 2012 and prepare the journal entry. (5 points)

c. Assume that the recoverable amount of the Mars division is Rp2.100.000 instead of Rp3.000.000. Prepare the journal entry to record the impairment loss, if any, on December 31, 2012. (5 points)



Question 5 (15%)

Part A (7 points)

This part is about the infamous lawsuit between SAMSUNG Electronics Co. Ltd. And APPLE Inc. about the use of certain patented technology. The following is an excerpt from the audited financial statement of SAMSUNG Electronics Co. Ltd. For the year ended 31 December 2011:

As of December 31, 2011, in addition to the case mentioned above, the Company’s domestic and foreign subsidiaries have been involved in various claims and proceedings with Apple and other companies during the normal course of business, the amount and timing of these matters cannot be reasonably determined. The Company’s management believes that, although the amount and timing of these matters cannot be reasonably determined, the conclusion of these matters will not have a material adverse effect on the financial position of the Company.

The following is an excerpt from the audited financial statement of APPLE Inc. for the year ended 29 September 2012:

Apple Inc. vs Samsung Electronics Co., Ltd, et al.

On August 24, 2012, a jury returned a verdict awarding the Company $1.05 billion in its lawsuit against Samsung Electronics and affiliated parties in the United States District Court, Northern District of California, San Jose Division. Because the award is subject to entry of final judgment and may subject to appeal, the Company has not recognized the award in its consolidated financial statements for the year ended September 29, 2012 (hint: appeal = “naik banding”)

Instructions: State whether SAMSUNG should recognize a liability towards APPLE in its upcoming Statement of Financial Position as of 31 December 2012? Support your answer by providing the conceptual considerations.

Part B

Rodriguez Corporation includes the following items in liabilities at December 31, 2011.

1. Notes payable, $25,000,000, due June 30, 2011. 2. Deposits from customers on equipment ordered by them from Rodriguez, $6,250,000. 3. Salaries payable, $3,750,000,00, due January 14, 2012.

Instructions: Indicate in what circumstances, if any, each of the three liabilities above would be excluded from current liabilities.



Question 6 (20%)

PT Berdikari has a defined benefit plan for its employees. The movement on the defined benefit obligation and plant assets for the year are set out below:

Liabilities (or obligation) in Rp’000 Plan (scheme) assets in Rp’000

Balance b/f 9,000,000 Balance b/f 8,550,000

Current Service Cost 1,800,000 Contribution Made 900,000

Interest Cost ? Expected return on assets ?

Past Service cost 90,000 Actuarial gain/loss ?

Curtailment/Settlement 72,000 Fair Value of Plan Assets 9,810,000

Actuarial gain/loss ?

Present Value of Obligation 11,600,000

PT Berdikari has recognized all cost, except for actuarial gain and loss. Actuarial loss of only Rp150 mio has been recognized during the year. Discount rate and expected rate of return on plan assets at start of year are 6% and 7% respectively.

Instructions:

1. Calculate the amount recognized in the statement of financial position and reconcile it to the present value of defined benefit obligation (7%)

2. Calculate the amount charge to profit and loss (7%) 3. Prepare the journal entry related to employee benefit in current year (6%)



ANSWER

Question 1

1. Journal Entries:

Year Date Account Debit Credit

2009 Jan 1 Equipment 540,000,000

Cash 540,000,000

Dec 31 Depreciation expense 90,000,000

Acc. Depr. equipment 90,000,000

2010 Dec 31 Depreciation expense 90,000,000



Gain on revaluation (nilai

wajar-‐nilai buku saat itu)

80,000,000

Equipment 100,000,000

2011 Dec 31 Depreciation expense 110,000,000

Acc. Depre. equipment 110,000,000

(nilai buku setelah revaluasi: sisa

umur manfaat)

Accumulated other

comprehensive income (selisih

beban depresiasi yang baru

dengan yang lama)

20,000,000

Retained earnings 20,000,000


Gain on revaluation 60,000,000

Loss on impairment 30,000,000

Equipment 200,000,000



2. Amounts to be reported PT Jaya at: a. December 31, 2010

Equipment Book Value: 540,000,000-‐90,000,000-‐90,000,000= 360,000,000 Fair Value: 440,000,000 Other Comprehensive Income: 80,000,000 Depreciation expense: 540,000,000 : 6 years = 90,000,000 Impairment loss: 0 Accumulated Other Comprehensive Income: Equipment Fair Value: 440,000,000 -‐ Equipment Book Value: 360,000,000 = 80,000,000

b. December 31, 2011

Equipment Book Value: 440,000,000 – 110,00,000 = 330,000,000

Fair Value: 240,000,000 Other Comprehensive Income: Depreciation expense: 440,000,000 : 4 years = 110,000,000 Impairment loss: 30,000,000 Accumulated Other Comprehensive Income: 80,000,000 (from gain on revaluation from previous year) – 20,000,000 (selisih beban depresiasi yang baru dengan yang lama) – 60,000,000 (from loss on revaluation in that year) = 0

3. Entries for the sale of equipment Book Value at June 30, 2012: 240,000,000 – (80,000,000 x 0.5 years) = 200,000,000 Journal: 2012 dr: Depreciation expense 40,000,000 Cr: Acc. Depre. Equipment 40,000,000 dr: Acc. Depre. Equipment 40,000,000 Cr: Equipment 40,000,000 June 30 dr: Cash 200,000,000 Cr: Equipment 200,000,000

Question 2

(a) Property D meets the definition of investment property under IAS 40, and PT XYZ must use IAS 40 to account for it. Property C do not meet such a definition since it is neither owned nor held by PT XYZ under a finance lease, but for Properties A and B which are held by the company under finance lease, they are classified as investment properties. However, PT XYZ has a classification alternative under IAS 40 to choose to account for



Property C as investment property. In consequence, PT XYZ can consider the following alternatives: 1. If Property C is not accounted for under IAS 40 as investment property, PT XYZ will

be required to use the fair value model in accordance with IAS 40 to account for all properties classified as investment property. The property not classified as investment property should be accounted for by using IAS 17 Leases.

2. If Property C is not classified as investment property, PT XYZ will be required to account for Property C as a lease under IAS 17 and will choose between cost model and fair value model in accordance with IAS 40 to account for Property D, A and B.

(b) PT Hotel Cahaya should change its accounting treatment for its hotel properties because according IAS 40, hotel properties were no longer to be accounted for as investment properties but should adopt IAS 16 Property, Plant and Equipment. The adoption of IAS 16 has resulted in a change in accounting policy relating to hotel properties, and retrospective application is required.

(c) Property C should have been accounted for by using the revaluation model in accordance with IAS 16. It should be transferred from owner-‐occupied property to investment property at the date of the lease commencements as there is a change in use evidenced by the lease commencement. In accordance with IAS 40, PT LMN should apply IAS 16 on Property C up to the date of change in use and treat any difference at that date between its carrying amount under IAS 16 and its fair value in the same way as a revaluation under IAS 16. In consequence, a revaluation surplus of Rp50.000.000 should be further recognized. Total revaluation reserves become Rp150.000.000 (Rp100.000.000+Rp50.000.000). The reserves should be frozen and accounted for in accordance with IAS 16 subsequently. Dr Property, plant and equipment Rp150.000.000 Cr Revaluation reserves Rp150.000.000 To recognize the additional revaluation surplus. Dr Investment property Rp550.000.000 Cr Property, plant and equipment Rp550.000.000 To reclassify the property from property, plant and equipment to investment property.

(d) a. The delay in the timing of transfer of the existing resort imposed by Nirmala Resort Limited demonstrates that the resort is not available for immediate sale. The criteria in IFRS 5 would not be met until construction of the new resort is completed, even if a firm purchase commitment for the future transfer of the existing resort is obtained earlier.



b. As the resort is sold at usual and customary conditions, the criteria stated in IFRS 5 would be met at the plan commitment date.

Question 3

Year Date Account Debit Credit 2009 Jan 1 Trademark 500,000 Cash 500,000 2012 Dec 31 Loss on impairment 350,000 Acc. Amortization-‐

Trademark 350,000

2013 Dec 31 Amortization expense 50,000 Acc. Amortization-‐

Trademark 50,000

In 2012, the company stated that the demand for Persada’s patented product-‐line is expected to remain strong until December 2015 (maximum extent of the patent’s period to generating cash flows), so from 31 December 2012 the company should start amortize the patent until next three years. (150,000 : 3 years)

Question 4

a. Amount of goodwill recognized: fair value of net assets – amount paid to acquire all common stocks. 1 Apr 2012 Accounts Fair Value Cash 309.145 AR (current) 201.965 Inventory (current) 155.390 Prepaid Expenses (current) 90.210 Land (non-‐current) 1.125.000 Building (non-‐current) 656.250 Equipment (non-‐current) 620.400 Goodwill



AP (liability) 218.360 Bank Payable (liability) 240.000 Total of fair value of assets in 1 April 2012 is 3.158.360 – Total liabilities in 1 April 2012 (458.360) = 2.700.000 Goodwill 1 April 2012 = 3.500.000 – 2.700.000 = 800.000 Journal entry: Dr Cash 309.145 AR 201.965 Inventory 155.390 Prepaid Expenses 90.210 Land 1.125.000 Building 656.250 Equipment 620.400 Goodwill 800.000 Cr Cash 3.500.000 AP 218.360 Bank Payable 240.000 Total of book value of net assets in 31 December 2012 (after deducted by the total amount of liabilities) is Rp2.200.000+Rp800.000=Rp3.000.000

b. Because the recoverable amount on December 31, 2012 is higher than its carrying amount (Rp3.000.0000), there is no impairment loss incurred and no journal entry should be prepared.

c. If the recoverable amount on December 31, 2012 is Rp2.100.000 which is lower than the carrying amount (Rp3.000.000), the company should recognize the impairment loss Rp3.000.000 – Rp2.100.000 = Rp900.000. Journal entry: Dr Loss on impairment 900.000 Cr Goodwill 800.000 Cr PPE 100.000



Question 5

Part A

SAMSUNG should not recognize the liability because the liability is classified as contingent liability. From the excerpt of the audited financial statement of SAMSUNG Electronics Co. Ltd. For the year ended December 31, 2011, the amount and timing of these claims and proceedings cannot be reasonably determined and will not have a material adverse effect on the financial position of the Company. From the excerpt of audited financial statement of APPLE Inc. for the year ended 29 September 2012, although on August 24, 2012 a jury returned a verdict awarding the Company $1.05 billion in its lawsuit against SAMSUNG, the company has not recognized the award in its consolidated financial statement because it is subject to entry of final judgment and may subject to appeal (“naik banding”) so the final judgment can be reversed. The definition of contingency liabilities from PSAK 57 (Revisi 2009) Provisi, Liabilitas Kontinjensi, dan Aset Kontinjensi is:

1. Kewajiban potensial yang timbul dari peristiwa masa lalu dan keberadaannya menjadi pasti dengan terjadi atau tidak terjadinya satu peristiwa atau lebih pada masa depan yang tidak sepenuhnya berada dalam kendali perusahaan.

2. Kewajiban kini yang timbul sebagai akibat dari peristiwa masa lalu, tetapi tidak diakui karena: a. Tidak terdapat kemungkinan besar (not probable) perusahaan mengeluarkan

sumber daya yang mengandung manfaat ekonomis untuk menyelesaikan kewajibannya; atau

b. Jumlah kewajiban tidak dapat diukur secara andal. From the definition above, we can conclude that SAMSUNG’s liability towards APPLE meets the definition of contingent liability and SAMSUNG should not recognize it in its upcoming Statement of Financial Position as of 31 December 2012.

Part B

1. Since the notes payable already due before December 31, 2011, the notes payable should be excluded from current liabilities in December 31, 2011.

2. Generally, deposits from customers would be classified as a current liability. However, the classification of deposits as current or non-‐current depends on the time involved between the date of deposit and the termination of the relationship that required the deposit. In this case, the $6,250,000 would be excluded from current liabilities only if the equipment would not be delivered for more than one year (or one operating cycle).

3. Salaries payable is an accrued liability which in almost all circumstances would be reported as a current liability (could not be excluded).



Question 6

1. Amount recognized in the balance sheet and reconciliation: Present value of defined benefit obligation 11,600,000 Less: fair value of plan assets (9,810,000) Less: Unrecognized actuarial loss Balance recognized in the balance sheet

2. The charges/(credit) to the profit or loss include: Current service cost 1,800,000 Interest cost Past service cost 90,000 Settlement and curtailment cost 72,000 Actuarial loss recognized during the year Expected return on plan assets

3. Journal entries related to employee benefit in current year: Dr P/L – Current service cost 1,800,000 Cr Retirement plan 1,800,000 To charge the current service cost to income statement. Dr P/L – Interest cost Cr Retirement plan To charge the interest cost to income statement. Dr P/L – Past service cost 90,000 Cr Retirement plan 90,000 To charge the past service cost to income statement. Dr P/L – Settlement and curtailment cost 72,000 Cr Retirement plan 72,000 To charge the settlement and curtailment cost to income statement. Dr P/L – Actuarial loss Cr Retirement plan To charge the actuarial loss recognized during the year. Dr Retirement plan Cr P/L – Expected return on plan assets To recognize expected return on plan assets.

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