92.
INDOFOOD AGRI RESOURCES LTD
ANNUAL REPORT 2015
N
O
T
E
S
T
O
T
H
E
F
I
N
A
N
C
I
AL
S
TA
TE
M
ENTS
For the financial year ended 31 December 2015
3.
SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)
3.1
Judgements made in applying accounting policies (cont’d)
(b)
Allowance for uncollectible plasma receivables
The Group evaluates the excess of accumulated development costs over the banks’ and Group’s funding on the
amount committed by the plasma farmers. In such cases, the Group uses judgement, based on available facts
and circumstances, to record allowance for uncollectible plasma receivables. These provisions are re-evaluated
and adjusted as additional information received. The net carrying amount of the Group’s plasma receivables as
of 31 December 2015 and 2014 is disclosed in Notes 21 and 23.
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting
period are discussed below. The Group based its assumptions and estimates on parameters available when the financial
statements were prepared. Existing circumstances and assumptions about future developments, however, may change
due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
(a)
Goodwill impairment
Determining the fair values of biological assets at the date of business combination, requires the determination
of future cash flows expected to be generated from the continued use and ultimate disposition of such assets,
requires the Group to make estimates and assumptions that can materially affect its consolidated financial
information. Future events could cause the Group to conclude that biological assets are impaired. The preparation
of estimated future cash flows involves significant estimations. While the Group believes that its assumptions
are appropriate and reasonable, significant changes in its assumptions may materially affect its assessment of
recoverable values and may lead to impairment charge in the future.
Impairment review is performed when certain impairment indication is present. In the case of goodwill, such
assets are subject to annual impairment test and whenever there is an indication that such asset may be
impaired. Management has to use its judgement in estimating the recoverable value.
The carrying amount of the Group’s goodwill as at 31 December 2015 is Rp3,253.6 billion (2014: Rp3,253.6
billion). Further details are disclosed in Note 15.
(b)
Pension and employee benefits
The determination of the Group’s obligations and cost for pension and employee benefits liabilities is dependent
on its selection of certain assumptions used by independent actuaries in calculating such amounts. Those
assumptions include among others, discount rates, future annual salary increase, annual employee turnover
rate, disability rate, retirement age and mortality rate. Actuarial gains or losses arising from experience
adjustments and changes in actuarial assumptions are recognised immediately in other comprehensive
income as and when they occur. While the Group believes that its assumptions are reasonable and appropriate,
significant differences in the Group’s actual experiences or significant changes in the Group’s assumptions may
materially affect its estimated liabilities for pension and employee benefits and net employee benefits expense.
The carrying amount of the Group’s employee benefits liabilities as at 31 December 2015 is Rp1,744.2 billion
(2014: Rp1,803.2 billion). The key assumptions applied in the determination of pension and employee benefits
liabilities including a sensitivity analysis, are disclosed and further explained in Note 28.
