EVALUATION OF THE APPLICATION OF BIOLOGICAL ASSETS PSAK NO.69 IN THE PLANTATION INDUSTRY IN PT PERKEBUNAN NUSANTARA XII SURABAYA
- Grouping Biological Assets of PT. Perkebunan Nusantara XII Biological assets are types of assets in the form of live animals or plants owned by a company. Based on accounting policies at PT. Perkebunan Nusantara XII, live plants or productive plants are divided into 2 parts, namely immature plantations (TBM) and mature plants (TM). Immature plantations are stated at cost which includes land preparation, planting, fertilizing and maintenance costs, including capitalization of borrowing costs used to finance the development of immature plantations and other indirect costs allocated based on the area of planted hectares at the end of the year up to the time the plants are planted. ready to be harvested, as long as the carrying value of the immature plant does not exceed the lowest value between the replacement cost or the recoverable amount. Immature plantations are not amortized. Biological assets of PT. Perkebunan Nusantara XII, namely productive plants in the form of rubber, tea, sugar cane and various standing timber. Recognition of biological assets in the form of productive plants are grouped on non-current assets which are classified into 2 parts, namely immature plantations (TBM) and mature plants (TM). Biological assets of immature plantations are stated at cost which includes land preparation, planting, fertilizing and maintenance costs, including capitalization of borrowing costs used to finance the development of immature plantations and other indirect costs allocated based on the area of planted hectares at the end of the year up to the time of the plant is ready for harvest, as long as the carrying value of immature plantations does not exceed the lowest value between the replacement cost or the recoverable amount. Immature plantations are not amortized. For mature plants, the costs of immature plantations are reclassified to the account of the plants already produced at the time the plants begin to produce. The period of time a plant is declared to start to produce is determined based on vegetative growth and based on management estimates, with the following conditions: a. Rubber plantations are declared as mature crops when they are five years old and 60% of the total number of trees per block can be tapped and has a 45 cm trunk circumference measured at 1 meter height of grafting linkages. b. Other plants, namely tea, cocoa and coffee are declared as mature crops if the plants are 4 years old. Referred to as the yield crop because it has been able to provide benefits / contributions to companies in the form of the ability to produce agricultural products, it is necessary to do a shrinkage to recognize the benefits of the crop produced in each period. Depreciation is calculated using the straight-line method over the estimated useful life, as follows: Table 4.2 Depreciation Estimation of Economic Benefits Type of Plant Depreciation Method Life Benefit Rubber Coffee Cocoa Tea Straight Line Straight Line Straight Line 25 Years 40 Years 25 Years 50 Years Source: 2018 Annual Report Based on the table above it is concluded that the estimated useful lives and methods of depreciation based on the type of plant asset are as follows: a. Rubber plant assets are stated to produce when they are 5 to 6 years old. Mature rubber plantations are recorded at the accumulated costs up to the time of reclassification of immature plantations, which are depreciated using the straight-line method over the estimated productive period of the plants concerned up to 25 years. b. Coffee plant assets are stated to produce when they are 5 to 6 years old. Mature rubber plants are recorded at the accumulated costs until the reclassification of immature plantations is depreciated
by using the straight-line method during the estimated productive life of the plants concerned up to 40 years. c. Cacao plant assets are stated to produce when they are 3 to 4 years old. Mature rubber plantations are recorded at the accumulated costs up to the time of reclassification of immature plantations, which are depreciated using the straight-line method over the estimated productive period of the plants concerned up to 25 years. d. Cacao plant assets are stated to produce when they are 3 to 4 years old. Mature rubber plantations are recorded at the accumulated costs up to the time of reclassification of immature plantations, which are depreciated using the straight-line method over the estimated productive period of the plants concerned up to 25 years. e. Tea plant assets are stated to produce when they are 5 to 6 years old. Mature rubber plants are recorded at the accumulated costs up to the time of reclassification of immature plantations, which are depreciated using the straight-line method over the estimated productive period of the plants concerned up to 50 years. The yield of the crop is agricultural products in the form of cocoa, coffee, rubber and tea. Agricultural products after harvest are recognized as inventories when they are ready for sale. Inventories are stated at cost or net realizable value. Net realizable value is the selling price in the ordinary course of business less the estimated costs required to make the sale. Cost of inventories uses the moving average method. Cost consists of expenses incurred to obtain inventory. Costs which are capitalized as acquisition cost are supporting material costs. 10. Recognition and Measurement of Biological Assets a. Recognition of Biological Assets Biological assets of PT. Perkebunan Nusantara XII consists of agricultural products from productive plants, mainly consisting of rubber, tea, sugar cane and various standing timber. The notes to the financial statements explain that the biological assets of productive plants are classified as current assets if they are expected to be harvested and sold or used for self-production, not later than 12 months after the reporting date is realized. Plants that produce yields in one season are grouped in inventory, while plants that have not produced become productive plants when the plants are able to provide benefits to companies in the form of agricultural products. b. Measurement of Biological Assets of Immature Plants Biological assets of immature plants are stated at cost, which includes the costs of land preparation, planting, fertilizing and maintenance, including capitalization of borrowing costs used to finance the development of immature plants and other indirect costs are allocated based on the hectare area embedded in end of the year until when the plant is ready for harvest, as long as the carrying value of the immature plant does not exceed the lowest value between the replacement cost or the recoverable amount. For example, the company bought 600 cacao edel seedlings to make 3 blocks of cacao plants at a unit price of Rp 30,000. Journal of the transaction: Immature Plant Rp. 18,000,000 Trade Debt of Rp. 18,000,000 The value entered in the journal is the value of costs paid by the company capitalized in the immature plant account.
The journaling is done every time there is a cash transaction paid for costs that are capitalized into immature plantations that meet the criteria for turning into cash crops. c. Reclassification of immature plantations to mature plants Accounts for mature plants are the result of the classification of the costs of immature plants at the time the plants begin to produce. Mature plants are measured at cost after deducting accumulated depreciation and accumulated impairment losses. Depreciation of plant assets is measured as a production expense or the additional costs incurred and the accumulated depreciation of plant assets is presented as a post deduction of the amount recorded and carried out when the plants have produced. The resulting crop is impaired, an impairment loss is recognized as a loss in the period in which it occurs. Mature plantations are accumulated losses from ongoing operations, if any are recognized as profit or loss according to the cost category that is consistent with the function The time period of a plant stated to start to yield is determined by vegetative growth and based on management estimates. Depreciation is carried out using the straight-line method, with the amount of depreciation that will remain the same from year to year until the useful life has expired. For example, PTPN XII’s edible cocoa farm was informed that more than 60% of the edible cocoa plants that had not yet produced in block II were categorized as mature crops, so all values in edible cocoa plants in block II had to be reclassified into mature crops, with the journal reclassification as follows: Yielding Plants Rp. 18,000,000 Yielding Plants Rp. 18,000,000 Yielding crops are valued based on the value of immature plants that are reclassified into mature crops. The process of capitalizing costs that are directly or indirectly related to productive plants are no longer carried out as in immature plants, the value of immature plants will not change unless there are other conditions that require the change in value. For example, the elimination of plant yields due to certain reasons. d. Recording of Plant Depreciation Produces PTPN XII conducts a recording of biological asset transactions by entering the amount of events that occur during the current period into the trial balance. The plants produced by the company have been able to provide benefits in the form of agricultural products, so there is an acknowledgment of the use of benefits into each period where the benefits are used. How to recognize the use of the benefits of the yield crop is to make a depreciation of the value of the crop that is utilized in each period. The company uses depreciation using the straight-line method. For example, edible cacao plants have produced a total value of Rp 158,808,056,622 with an economic age of 25 years, then a depreciation of Rp 37,801,327,624 will be obtained. Then the journal is: Depreciation Fee Rp. 37,801,327,624 Akum. Depreciation Rp. 37,801,327,624 The value of the depreciation of plant yields resulting in each period is based on the estimated benefits used in each period, the company recognizes the depreciation of plants produced by the straight-line method. The useful life of mature plantations is obtained from management’s estimation by considering the growth process of mature plantations. e. Presentation of Biological Assets Biological assets of agricultural products from productive plants in the Financial Statements of PT. Perkebunan Nusantara XII is presented on a Balance Sheet which is grouped into Non-Current Assets. Whereas supplies in the form of agricultural products are presented in Current Assets.