03/04/2019

Equity

Tax Accounting

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Equity
The residual interest in the assets of the company after
deducting all liabilities
Components:
1. Share capital
2. Share premium
3. Retained earnings
4. Accumulated other comprehensive income
5. Treasury shares
6. Non controlling interest (minority interest)

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Par value shares

1 March 2018, Moseley (PKP) issued 1.000.000 ordinary
shares at par value of Rp 1.000 in primary market.
Transaction price is Rp 1.500 per share.
Cash Rp 1.491.000.000
Income Tax Art 4(2) Rp 9.000.000
Share Capital-ordinary Rp1.000.000.000
Share Premium-ordinary Rp 500.000.000

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No Par Shares
1 March 2018, Moseley (PKP) issued 1.000.000 ordinary
shares in primary market. Transaction price is Rp 1.500 per
share.
Cash Rp 1.491.000.000
Income Tax Art 4(2) Rp 9.000.000
Share Capital-ordinary Rp1.500.000.000
Without any share premium reported

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Shares issued with other Securities

(Lump Sum Sales)
Challange: method to allocate the proceeds
1. Proportional Method
2. Incremental Method

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Proportional Method
Company issues 1.000 shares of Rp 1.000 stated value
ordinary shares having a fair value of Rp 2.000 a share and
1.000 shares of Rp 1.000 par value preference shares having a
fair value of Rp 1.200 a share for lump sum Rp 3.000.000.
FV of ordinary (1.000 x Rp 2.000) = Rp 2.000.000
FV of preference (1.000 x Rp 1.200) = Rp 1.200.000
Aggregate = Rp 3.200.000
Ordinary: 2.000.000/3.200.000x3.000.000=Rp1.875.000
Preferen:1.200.000/3.200.000x3.000.000 =Rp1.125.000
Total Allocation =Rp3.000.000

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Proportional Method Journal

Cash Rp 2.997.000
Inc Tax Art4(2) Rp 3.000
Share Capital-ordinary Rp 1.000.000
Share Premium-ordinary Rp 875.000
Share Capital-preference Rp 1.000.000
Share Capital-preferences Rp 125.000
Note: transaction in secondary market

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Incremental method
Requirement: cannot determine all the fair value
Company issues 1.000 shares of Rp1.000 stated value
ordinary shares having a fair value of Rp2.000 and 1.000
shares of Rp1.000 par value preference share having no
established fair value, for lump sum of Rp 3.000.000
Lump sum receipt Rp 3.000.000
Ordinary(1.000xRp2.000)(Rp 2.000.000)
Preference Rp 1.000.000

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Incremental Method Journal

Cash Rp 2.997.000
Inc Tax Art4(2) Rp 3.000
Share Capital-ordinary Rp 1.000.000
Share Premium-ordinary Rp 1.000.000
Share Capital-preference Rp 1.000.000
Note: transaction in secondary market

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Non Cash Transaction

Rule: record shares issued for non cash at fair value unless it
cannot be measured reliably, use the fair value of shares
issued
Moseley issues 100.000 of Rp1.000 par value ordinary
shares. Moseley cannot determine the fair value of the shares
but the fair value of the patent is Rp 150.000.000
Patent Rp 150.000.000
Share Capital-Ordinary Rp 100.000.000
Share Premium-ordinary Rp 50.000.000

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Cost of issuing
Record direct cost incurred to sell shares such as
underwriting cost, accounting and legal fees, printing costs
and taxes as a reduction of the amounts paid in and debits to
share premium.

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Issues shares (on the floor)

25 January 2018, Moseley issues ordinary shares with
carrying value of Rp 200.000.000,receiving Rp 287.220.000
in secondary market stock exchange. Levy or transaction cost
was 0,03% and income tax article 4 ver 2 was 0,1%
Cash 286.846.614
Inc tax Art 4(2) 287.220
Transaction Exp 86.166
Equity investment 200.000.000
Share-Premium 87.220.000
In IPO, extra Income tax article 4 ver 2 is 0,5%

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Reacquisition of shares
It considers as dividend
Reacquisition method: Cost method and Par value method
Moseley acquire 10.000 shares at Rp 1.100 per share.
Treasury stock Rp 11.000.000
Cash Rp 11.000.000

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Cash Dividend
31 December 2017, Moseley (PKP) declared a cash dividend
of Rp 4.200.000 to Hindmarsh with 20% interest
Cash Dividend 4.200.000
Cash Dividend Payable 3.570.000
Income tax 23 liability 630.000

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Share Split
Records no entry for a share split

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Requirement of Revaluation
Fulfill all its tax obligations up to the last tax period before
the period of the assessment of revaluation
Excluding the company obtained permission to keep books in
the English language and currency United States Dollar

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Income Tax Article 19 rate

10% of the excess over revaluation
Final

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Time limit
5 years

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PMK 191/PMK.010/2015 jo
PMK 233/PMK.03/2015
Period Rate
Up to end of 2015 3%
The beginning of 4%
2016 up to mid 2016
The mid 2016 up to 6%
end if 2016

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Revaluation Case
PT Dynaplast has purchased land in 1980 amounting to Rp
15,000,000. At the time of making the financial statements in
2017, PT Dynaplast reassessment or revaluation of the value
of the land. Revaluation by appraiser turns valued at Rp 150
million. What is the income tax payable on the revaluation is
done?

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Revaluation Journal Entry

Land Rp 135.000.000
Unrealized Gain on Revaluation Rp 121.500.000
Income Tax Art19 Rp 13.500.000

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Closing
31 December 2017, Moseley (PKP) declared a cash dividend
of Rp 4.500.000 to Hindmarsh with 25% interest. Mind the
journal entry from Moseley

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