Kelompok 10

Nama NPM
Gordon Parulian S 2106803566
Yohanna Bregiba L P 2106804101

CASE 1 – Asset Part 1

You are an audit senior in an accounting firm, KAP Bertha & Rekan. It is February 2022 and you
are currently reviewing the draft of financial statements of the PT Juri which has recently become
a client of your firm. The shares of PT Juri is listed on the Indonesia stock exchange.
There was an issue that arisen in respect of the audit of PT Juri for the year ended 31 December
2021. The audit manager, Mr. Oyo, has requested that you review these issues and send him a
memorandum with your observations and recommendations.

Issue 1 - Revaluation of land

PT Juri purchased one lot of land for Rp25 billion in 2019 for storage of the building supplies. In
2020 the area adjacent to the land was identified as the development site for a new shopping center.
PT Juri revalued the land to Rp90 billion at 31 December 2020 due to its newly acquired
development potential. Ignore the deferred tax effect on this transaction.
During 2021 a protest campaign by local residents resulted in the local council withdrawing
permission for the commercial development, and at 31 December 2021 the land was revalued to
Rp50 Billion. At that time, most of the area was being utilized for storage, with small section being
fenced off for parking by personnel.

Required:
1. Explain the correct accounting treatment of the land since its purchased in 2019
Answer : The measurement after recognition using revaluation model according to PSAK 16 based on historica

2. Set out the journal entries required to reflect your recommended accounting treatment
Answer :

a. Land acquisition journal on 2019

Db. Land 25,000,000,000.00
Cr. Bank/Debt

b. Revaluation value on 2020

Db. Land 65,000,000,000.00
Cr. Revaluation surplus - OCI

(Based on PSAK Chapter 16 Pg. 39, the increment of asset amount due to revaluation asset will be rec

c. Impairment value on 2021

Db. Loss on revaluation asset - OCI 40,000,000,000.00
Cr. Land

(Based on PSAK Chapter 16 Pg 40, the decrement of asset amount due to impairment of asset will be
3. What if the asset was revalued to Rp20 billion in 2020 and Rp50 billion in 2021? Prepare the necessary journal entries.
Answer :

a. Impairment value on 2020

Db. Loss on revaluation asset 5,000,000,000.00
Cr. Land

(The decrement of asset value based on PSAK 16 Pg. 40 for Impairment Value will be record on profit
Explaination : in this case, we did not know the oustanding of OCI, so we assume that OCI has no ba

b. Revaluation value on 2021

Db. Land 25,000,000,000.00
Cr. Gain on revaluation asset

Issue 2 – Inventory
Leather is a primary material used by PT Juri for the manufacture of shoes. Leather inventory at
31 December 2021 had cost Rp50 million to purchase, but only had a net realizable value of Rp30
million. On the basis that PT Juri does not intend to dispose of the leather, the inventory has been
included in the financial statements at a value Rp35 million. It is believed that this partially reflects
the fall in value of the leather, but also takes account of the intention to retain the inventory for use
in the production process. It is expected that the finished shoes, into which the leather will be
incorporated, can be sold at reasonable profit margin.

Required:
1. Advice correct accounting treatment of the leather inventory of the company at 31 December 2021. Explain.
Answer : The recognition of inventory is based on nett realization value amounted IDR 30 Million

2. Provide relevant journal entries.

Answer :
a. Purchase Journal
Db. Inventory - Leather 50,000,000.00
Cr. Cash / Debt

b. Record journal based on Lower amount between NRV vs Impairment cost

Due to the amount of NRV is lower than decrement cost, so the journal will be stated :
Db. Inventory Expense - Leather 20,000,000.00
Cr. Allowance for Inventory decline to market

c. Adjustment journal due to financial statements at value IDR 35 Million

Db. Allowance for Inventory decline t 5,000,000.00
Cr. Inventory - Leather

(Due to the calculation of Inventory - Leather per 31 Dec'21 amounted IDR 35 Million)
Untuk bahan baku tidak di terapkan
PSAK 14 Pg.32

Ini raw material sudah terlanjur di turunkan ke 35, jadi harus dinaikkan ke 50 balik
Db. Inventory - Leather 15,000,000.00
Cr. Loss atau COGS
-> Tergantung metode pendekatannya
Lebih tepat pake yang loss karena belum kejual barang nya
ntly become

hopping center.

revalued to
ection being

according to PSAK 16 based on historical amount i.e IDR 25 Billion

25,000,000,000.00

65,000,000,000.00

mount due to revaluation asset will be record on OCI (Other Comprehensive Income)

40,000,000,000.00

mount due to impairment of asset will be record on OCI as long as doesn't exceed the revaluation value)
epare the necessary journal entries.

5,000,000,000.00

mpairment Value will be record on profit and loss)

of OCI, so we assume that OCI has no balance and the impact of impairment asset will be record direct on profit and loss

25,000,000,000.00

alue of Rp30
ory has been
tially reflects
ventory for use

December 2021. Explain.

e amounted IDR 30 Million

50,000,000.00

the journal will be stated :

20,000,000.00

5,000,000.00

amounted IDR 35 Million)

dinaikkan ke 50 balik

15,000,000.00

jual barang nya

profit and loss