Assets

ASSETS
DEFINED
• An asset is a resource
controlled by the entity as a
result of past events and
from which future economic
benefits are expected to flow
to the entity

IASB “FRAMEWORK FOR THE

PREPARATION AND
PRESENTATION OF FINANCIAL
STATEMENTS (PARA 49)

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 FUTURE ECONOMIC
BENEFITS
• Benefits for a for-profit business associated with
the activities that generate profit
• To qualify as an asset, future economic benefit
must help the entity pursue its objective
• Main characteristics of an economic resources:
Scarcity and Utility
• Asset exists now, has the capability of rendering
service/benefit currently or in the future
• Assets could be tangible and intangible

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 CONTROL BY ENTITY
• Entity’s right to use or control an asset is never absolute
e.g. ownership of home, doesn’t entitle you to use it for commercial
purposes, unless government permitted

• Ownership is often concurrent with control, but owner’s control

is not an essential characteristic of an asset
e.g. agent who holds goods for sale on behalf of principal

• Could be transfer fully without having to wait for the “title”,

more to “right”

• Accounting concentrating on the economic substance of the

 PAST EVENTS
• “Planned” assets are not included as the
definition of assets.
• Wholly executory contracts arise where each
party to the contract has yet to perform exactly
the same percentage of its obligations under the
contract
• Executory contracts sometimes are recognised as
assets and some not, depending on the
requirement of accounting standards
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 EXCHANGEABILITY

• Not an essential characteristic

• Means that an item is separable from an entity, and
that its disposal value is separate from the value of the
entity.
• Goodwill, as argued by Chambers is not included as an
asset
• Exchangeability is opposed as a condition of asset
definition, because it is only one way to obtain the
benefits of assets.
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 ASSET
RECOGNITIO
N

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 ASSET RECOGNITION
• Accountants want to be sure that particular
assets exist and inclusion in the balance sheet
provides useful information that is both relevant
and reliable (recognition rules).
• Conventional recognition rules are: Account
receivable is recorded as an asset when a credit
sale is made and Equipment is recorded as an
asset when it is purchased
• Recognition guideline that is formally specified is
the guideline adopted for the recognition of
finance leases as assets (Lease to be deemed an
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operating lease) why?

 ASSET RECOGNITION
Recognition criteria contained in the Framework are
extensions of qualitative characteristics of
relevance and reliability

Criteria that is not mutually exclusive:

• Reliance on the law (substance over form,
framework par 35)
• Materiality (economically significant) x
materiality
• Use of the conservatism (Prudence principle) x
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Ilustrasi Biaya Perolehan
Contoh
Contoh

Berikut ini biaya yang dikeluarkan PT. Kelana dalam rangka

perolehan mesin baru untuk produk barunya:
1. 5 milyar untuk pembelian mesin
2. 50 juta biaya tenaga kerja untuk merubah interior pabrik agar
sesuai dengan penggunaan mesin.
3. 100 juta untuk penyiapan lokasi pabrik Diskusikan
4. 80 juta untuk pengiriman mesin mana yang
5. 500 juta PPN dan 500 juta bea masuk. merupakan
6. Biaya promosi produk baru 800 juta biaya
10
7. Biaya instalasi mesin sebesar 120 juta perolehan??
8. Biaya pengetesan awal 50 juta
9. Biaya grand opening 130 juta
10. Biaya tenaga enginering yang melakukan pengetesan dan
instalasi 30 juta
11. Biaya administrasi yang dimasukkan dalam biaya overhead 25
juta
 Acquisition
Acquisition Cost
Cost

Pengeluaran dan penerimaan berikut terkait dengan tanah, land

improvement dan pembelian gedung. Tentukan bagaimana
perusahaan mengklasifikasikan pengeluaran tersebut?
Klasifikasi
(a) Uang yang dipinjam untuk mendanai konstruksi Utang Bank
(b) Pengeluaran untuk konstruksi dari pinjaman Bangunan
(c) Biaya untuk perataan tanah Tanah
(d) Biaya pajak dan pengurusan ijin pembangunan Tanah
11

(e) Pembayaran asuransi selama proses Bangunan

pembangunan konstruksi
(f) Pengembalian polis asuransi satu bulan karena (Bangunan)
konstruksi selesai lebih awal.
 Asset
Asset Acquisiton
Acquisiton

Pengeluaran dan penerimaan berikut terkait dengan tanah, land

improvement dan pembelian gedung. Tentukan bagaiaman
perusahaan mengklasifikasikan pengeluaran tersebut?
Classification
1. Biaya arsitek untuk bangunan Bangunan
2. Biaya real estate yang dibeli untuk pabrik
Tanah
(tanah Rp20M dan bangunan Rp5M)
3. Biaya komisi untuk agen real estate Tanah
4. Pemasangan pagar di sekitar properti
12 Perbaikan Tanah
5. Biaya penghancuran bangunan dan perataan
Tanah
tanah
6. Uang yang diterima dari penjualan puing (Tanah)
bangunan
7. Biaya lahan parkir dan jalan raya Perbaikan Tanah
8. Biaya penanaman pohon (permanen) Tanah
Pengukuran Awal
Example
Example

•• Biaya
Biaya dari
dari pembukaan
pembukaan pabrik
pabrik tersebut
tersebut sebesar
sebesar
5.000+50+100+80+500+500+120+50+30=6.430
5.000+50+100+80+500+500+120+50+30=6.430 milyar milyar
•• Biaya
Biaya yang
yang tidak
tidak berhubungan
berhubungan langsung
langsung dengan
dengan
perolehan
perolehan dan
dan pemasangan
pemasangan mesin
mesin pabrik
pabrik tersebut
tersebut tidak
tidak
boleh
boleh diakui.
diakui.
•• Biaya
Biaya yang
yang tidak
tidak boleh
boleh dimasukkan
dimasukkan adalah:
adalah:
1.
1. Biaya
Biaya grand
grand opening
opening 130
130 juta
13 juta
2.
2. Biaya
Biaya promosi
promosi produk
produk baru
baru 800
800 juta
juta
3.
3. Biaya
Biaya administrasi
administrasi yang
yang dimasukkan
dimasukkan dalam
dalam biaya
biaya overhead
overhead 25
25
juta
juta
Measurement of Acquisition Cost

• Discount — Should be deducted from the cost of the

asset
• Deffered Payment— Assets purchased with deferred
payments are valued at their cash value. The difference
between cash value and payment is recognised as interest
expense.
• Exchange of assets - value is used unless there is no
economic substance or no reliable fair value.
14

• Lump sum purchases - 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)
 ASSET
MEASUREME
NT

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 ASSET
MEASUREMENT

• Asset measurement may be disclosed in the

notes to the accounts, not recognised in the
financial statement

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 TANGIBLE ASSET
• GAAP and IASB have embedded the usage of historical
cost
• Reflects a conservative approach to asset
measurement.
• Assets are measured at acquisition cost less any
accumulated depreciation and impairment changes.
• Revaluation asset can provide more current information
about value than historical cost (less use, not much
difference)
• Current measurement is unreliable and subjective.
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 PROPERTY, PLANT,
EQUIPMENT
• Tangible items that are held for use in the production or
supply of goods or service, for rental to others, or for
administrative purposes and are expected to be used
during more than one period
• PPE are recognized as an asset if and only if it is
probable that future economic benefits associated with
the item flow to the entity and the cost of the item can
be measured reliably
• Measured by its cost of requirement
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 PROPERTY, PLANT,
EQUIPMENT
• Depreciated/amortized on a systematic basis over its
useful life
• Should be derecognize on disposal or when there is no
future economic benefits
• Gain or loss from derecognition in profit or loss
• Gain is not classified as revenue. Why?

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 INTANGIBLE ASSET

• Historical cost (less accumulated amortisation

and impairment) is the widely used measurement
method
• The valuation of intangible assets is contentious,
involving as it does subjective estimations of the
fair value of the asset

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 FINANCIAL
INSTRUMENT
• Dominant measurement, historical cost is inappropriate
to measure some financial instruments.
• Derivatives should be measured at fair value rather
than cost.
• Fair value measurement providing relevant information
for financial statement users.
• Gains and losses on financial instruments should be
recognised as they arise
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 FINANCIAL
INSTRUMENT
• Originated loans and receivables = amortised cost
• Held-to-maturity investments = amortised cost
• Available-for-sale securities = fair value
• Financial assets held for trading = fair value, with gain
and losses arising on remeasurement taken to profit
and loss.

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 CHALLENGES FOR
STANDARD SETTERS
• Boards will evaluate and rank measurement methods
according to the extent to which they meet required
qualitative characteristics of financial information.
• IFRS has introduced fair value measurement for
derivatives at each balance date and some other
financial assets and liabilities
• Fair value are used to measure assets on initial
recognition, but not for subsequent measurement
• Fair value measurement is not mandatory but rather an
option.
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 FAIR VALUE
MEASUREMENT
FASB’s SFAS 157 Fair Value Measurement provide
techniques:
• Market approach
• Income approach
• Cost approach

Hierarchy:
• Level 1: Use quoted prices
• Level 2: if quote price not available, fair value
shall be estimated based on quoted prices
• Level 3:
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 ISSUE FOR AUDITOR

• Auditor need to understand more about valuation

models and the management process to
determine those models
• Auditor need to understand client firm’s process
and relevant controls for determining fair value
• Make judgement

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 HOMEWORK
Consider the following four valuation methodologies:
• Cost approach (the after tax cost which would be incurred in reproducing the asset)
• Market transaction (actual transaction value for identical or similar asset based on an
arm’s length market transaction
• Income method (excess earnings)
• Income method (relief from royalty approach)

Which of the above approaches are appropriate for each intangible asset listed below?
Explain your answers
• Brands and trade marks
• Patents
• Customer Contract
• Internally generated
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