TAK: Assets

Conceptual Framework IFRS/IASB
Paragraf 4.3 An asset is a present economic resource controlled by the entity as a result of past events.

Differences between owned and controlled
 * Owned: have legal ownership of an asset.

Memperbolehkan entitas untuk mengakui lease asset as Right of Use (Hak Guna Aset)

PSAK 16 (Fixed Assets)
Paragraf 6 Aset tetap adalah aset berwujud yang: (a) dimiliki untuk digunakan dalam produksi atau penyediaan barang atau jasa untuk direntalkan kepada pihak lain, atau untuk tujuan administratif; dan (b) diharapkan untuk digunakan selama lebih dari satu periode.

Dalam PSAK 16, dikatakan bahwa aset yang dimiliki, namun dalam IAS 16 tidak ada istilah dimiliki/owned

PSAK 13 (Properti Investasi)
Paragraf 8 Properti Investasi adalah properti yang dikuasai (oleh pemilik atau oleh penyewa sebagai aset hak-guna) untuk menghahsilkan rental atau untuk kenaikan nilai atau keduanyaa

PSAK 19 (Intangible Assets)
Paragraf 08: Aset adalah sumber daya yang: (a) dikendalikan oleh entitas sebagai akibat peristiwa masa lalu; dan (b) manfaat ekonomis di masa depan dari aset tersebut diharapkan diterima oleh entitas.

Aset tidak berwujud adalah aset nonmoneter yang dapat diidentifikasi tanpa wujud fisik.

Goodwill yang dihasilkan internally tidak diakui sebagai aset.

IASB
The lASB(AASB) framework for the Preparation and Presentation of Financial Statements (para 49):

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.

3 essential characteristics & 1 additional characteristic:
 * 1) Future economic benefit
 * 2) Control by an entity
 * 3) Past events
 * 4) Exchangeability

Future Economic Benefit
Future economic benefits embodied in assets are the potential to contribute, either directly or indirectly, to the flow of cash and cash equivalents to the entity.

Example:
 * A motor vehicle owned by a reporting entity is an asset not because it is a physical object, but because it can provide the entity with future services in the form of transport.
 * The benefits may arise from the use or from the sale of the object or right. For example, a machine is an asset because it provides future services from use. Inventory is an asset because it can generate future economic benefits from sale.

The concept of an asset distinguishes between the object, such as a building or machine, and the services embodied in it.


 * PSAK 13 Investment Property
 * PSAK 16 Fixed Asset
 * PSAK 19 Intangible Asset
 * PSAK 73 Lease]]

Controlled by an Entity
The term 'own' or 'ownership', in ownership of asset simply mean owning the right to use or control.

The control an owner has of property is not absolute.

Example:
 * The government may prohibit the possession or manufacture of certain products. Through its power, it can nullify a person's control over property.

Title (in ownership of assets) is divisible. Several people can have different parts of the title of a particular asset.

Example:
 * Suppose a transport company purchases a truck for $300 000, paying $150 000 now and agreeing to pay the balance in instalments over the next 3 years. Despite the fact that the company does not possess the legal

document called the 'title' until it has fully paid for the truck, it owns the legal right to use the truck. Therefore, in accounting, we say the truck is an asset of the company.

Technically, the real asset is the right to use the truck, not the truck itself.


 * PSAK 19 Intangible Asset
 * PSAK 73 Lease

Past Event
'Planned' assets are excluded from asset.

Example:
 * A machine already acquired by a company is an asset, but a machine which is to be acquired according to the budget is not an asset until it has been acquired, since the event, a purchase transaction, has not yet taken place.
 * Wholly executory contracts arise where each party to the contract has yet to perform exactly the same percentage of its obligations under the contract.

Example:
 * A company signs a contract with a construction firm to have a new office building erected in the future for a given price. This type of contract is commonly called a 'wholly executory contract'.


 * PSAK 13 Investment Property

Exchangeability
Exchangeability means that an item is separable from an entity, and that its disposal value is separate from the value of the entity.

The asset especially affected by this condition is goodwill, since it cannot be sold separately from the other assets.

Exchangeability is a characteristic that supports the existence of an asset. However, it is not an essential characteristic.

Example:
 * Inventories are one type of asset whose benefits are derived mainly through exchange. But the benefits of most assets such as manufacturing plant and machinery and office buildings are obtained through their use.

The benefits of these assets are not affected by whether they are exchangeable.


 * PSAK 19 Intangible Asset

Asset Recognition
The extent and timing of the recognition of assets is important because it can have economic consequences for preparers and users of financial statements

Recognition Rules
 * Conventions
 * AR is recorded as an asset when credit sales is made
 * Equipment is recorded as an asset when it is purchased


 * Formally Designated Authoritative Pronouncements
 * The guideline adopted for the recognition of finance leases as assets.

Recognition Criteria
 * Future economic benefit
 * The future economic benefits mus be probable


 * Capable of being measured
 * The asset mus be capable of being measured reliably

Past Recognition Criteria
 * Reliance on the law
 * Recognition of many asset depends on the legal concept of an asset


 * Determination f economic substance of the transaction or event
 * Materiality is also a factor; if event is economically significant, itʼs important enough to record and report


 * Anticipate Losses but ot gains
 * Use of the conservatism principle: anticipate losses, but not gains

Asset Measurement
Pengukuran dilakukan setelah pengakuan asset

Fixed Assets
According to PSAK 16, measurement of fixed assets divided into 2 model:

Cost model measures fixed assets by subtracting the initial cost by the accumulated depreciation
 * Cost Model

Revaluation model measures fixed asset by subtracting the fair value at revaluation date with accumulated depreciation and accumulated loss of revaluation The revaluation model must be re-evaluated periodically
 * Revaluation Model

Investment Property
According to PSAK 13, measurement of investment property devided into 2 moel: Cost model measures fixed assets by subtracting the initial cost by the accumulated depreciation (PSAK 16).
 * Cost Model


 * Fair value model
 * Fair value model measure fixed asset by fair value. Any gain or loss arising from changes in the fair value of investment property are recognized in profit or loss in the period in which it occurs.

Companies can choose to use the cost model or the fair value model. However, the measurement model must be established for all investment properties.

Measurement of Intangible Assets

 * Cost Model
 * An intangible asset valued at cost less accumulated depreciation and accumulated impairment losses


 * Revaluation Model
 * An intangible asset valued at fair value less accumulated depreciation and accumulated impairment losses. The fair value of intangible asset must be determined by active market

Measurement of Financial Assets
According to PSAK 71, measurement financial assets divided into 3 model:


 * Amortised Cost
 * Amortised cost is used when the financial asset is held-to-maturity. Financial Assets is measured at cost


 * FVTOCI
 * FVTOCI cost is used when the financial asset is available-for-sale. Financial Assets is measured at fair value. Gain or losses from measurement is recognized in equity.


 * FVTPL
 * FVTPL cost is used when the financial asset is for trading purpose. Financial Assets is measured at fair value. Gain or losses from measurement is recognized in profit or loss statement.

Challenges for Standard
Which measurement model?
 * Fair value is the frontrunner
 * Both the IASB and FASB support greater use of fair value measurement

Calculate fair value measurement

 * Market Approach
 * observable prices
 * actual transaction data
 * contohnya aset yang tidak memiliki market value adalah aset dibuat khusus untuk perusahaan


 * Income Approach
 * conversion of future amounts
 * cash flows or earning to a single discounted present amount
 * contohnya aset yang tidak


 * Cost Approach
 * the amount that currently would be required to replace its service capacity (current replacement cost)

Three hierarchical levels for the inputs
According to PSAK 68,


 * Level 1
 * quoted prices for identical items in active markets, without adjustment


 * Level 2
 * quoted prices for similar items in active markets, adjusted as appropriate for differences


 * Level 3
 * estimated fair value using multiple valuation techniques consistent with the market, income and cost approaches

Setters Issues for Auditors

 * The absence of the ready market
 * Auditor cannot compare the fair value of assets with market


 * Develop more relevant control
 * To ensure the clientʼs measurement methods and assumptions are appropriate


 * Understand more about client's business process
 * To prevent potential biases from client when measure the asset

Read more

 * IAS 16
 * Conceptual Framework for Financial Reporting
 * PSAK 13 - Properti Investasi
 * PSAK 16 - Aset Tetap
 * PSAK 68 - Pengukuran Nilai Wajar
 * PSAK 19 - Aset Tak Berwujud
 * PSAK 73 - Lease