Hello everyone. Today I’d like to post an example
of English for Specific Purposes translation which I translated a couple of
years ago. It is a translation of a research journal article about accounting which
originally written in Indonesian Language. As there are many terms which are
specific to the accounting fields, some of them might not be translated
accurately. Please note that this translation is intended for sharing purpose
only. Credit of the journal goes to my client, the original researcher. Anyway,
here it is:
ABSTRACT
Keywords: Straight-Line
Method, Double-Declining Balance Method
Depreciation method
is the method used to compute the constant depreciation asset burden in each
period of accounting. The decrease method analyzed on this research is a
straight-line method and double-declining balance method. The profit is the
difference between the income on the cost related to the business activity of a
company. The amount of profit gained which is influenced by the straight-line
method will differ from the double-declining balance method.
This research is
intended to examine how is the difference if the method used in Handakkom
Division PT Pindad (Persero) is applied and its effect on the company profit,
the use of those formulas and to investigate its relationship with the profit
gained that is compared. The type of research used in this final project is
applying the case study approach with comparative method. Be it straight-line or double-declining balance method, the profit gained fluctuated
from year to year. Based on the table presented in this paper, straight-line
method produced greater profit compared to that of double-declining balance
method. This is caused by the number of decrease burden counted by each
decrease is different.
According to
the result of this research, it can be concluded that the amount of the constant decrease asset counted using straight-line method will be
different from the double-declining balance method. In contrast to this, the
decrease of the amount of decrease burden on a period of accounting is caused
by the overflowed constant asset and the stop of using constant asset
of the company.
INTRODUCTION
The growth of business which
progressively moving forward is very influencing the activity of a company in
reaching the target of its business. A particular target of a company in
general is obtaining optimal profit to make the company last as long possible
which means that a company has to maintain the continuity of its business by
operating the fundamental activities of the company to obtain profit matching
with the target specified by the company.
Some profits obtained by a company will be invested
in the company itself. One form of the investment
which is incalculated in the company is constant asset. Constant
asset has benefit to support the fundamental operation or activity of a company,
but the constant asset used cannot be continually operated. Every constant asset
has an economic age of more than one year in order to do the operational
activity of a company which will experience of a decrease (depreciation).
Every company which has constant assets
is surely has economic age, hence, every company will specify economic age of
the constant asset, this is because every used asset will dwindle. The decrease
represents the acquirement of cost allocation process of the asset to remain in
that amount in which it can be allocated systematically during its benefit age,
thus, the company requires to perform a rational and systematic cost allocation
method at the expense of constant asset by paying attention to the decrease
method used. As for decrease according to Warren, Reeve and Fees (2008;443)
"Degradation of price caused by the decrease of usefulness in a particular
parallel elapsing time is referred as depreciation.
The
appropriate asset decrease method will not influence the reported earnings in every
accounting period. Besides it will not influence the value of the constant asset
itself, therefore each company has to evaluate the permanence of their asset.
Basically each constant asset which has economic
age will decrease because of the damage and usage, obsolescence, technical problems
and other economic factors. In this case the company has to pay attention in
the allocation of repair cost, and conservancy to see whether it is constantly relative
or progressively mount. Hence, the management has to make some policy of
capitalization to match the asset with the specified amount of minimum
expenditure for constant asset remain to be categorized as revenue expenditure.
Therefore, on the contrary, the expenditure for constant asset which amount is above
the minimum expenditure is categorized as capital expenditure.
STATEMENT OF PROBLEMS
1. How is the method of asset decrease applied in Handakkom Division in PT.
Pindad (Persero)?
2. How is the relationship between the comparison of those methods with the
profit gained by the Handakkom Division in PT. Pindad (Persero)?
THEORETICAL FRAMEWORK
Congeniality of Constant Asset
According to Martina (2012:271) having
a notion that constant asset remain is extant asset which is:
- Owned to be used in goods supply or production or service,
for rent to the other party or administrative purposes, and
- Expected to be used in more than one period.
Pursuant to definition above there are several
relevant important things of constant asset remain to, they are:
1. Constant asset is extant asset, that is having physical
form ( like land, building), differing from trademark or patent which don't
have physical form (this asset is not extant)
2. Constant asset has a purpose or a special usage, that is
used in goods supply or production or service, for rent to the other party, or
for the administrative purpose. Asset like land owned by a company which is
meant to be sold is not a constant asset.
3. Constant asset is expected to be used in more than one
accounting period.
Congeniality of Decrease
According to Kartikahadi, Sinaga,
Syamsul and Siregar (2008:344) "Decrease is an acquirement cost allocation process of a
constant asset in such a way that its amount will be able to be allocated systematically
during its benefit age.”
While according to Warren, Reeve and
Fees (2008:443) "Decrease is each expense of released asset which has to be
transferred to the burden account systematically as long as its benefit age.”
Congeniality of
Profit
According to Ikatan Akuntansi Indonesia
(2009:23.1), profit is "Production (income) cover earnings (revenue) or
even (gains). Earnings is the production caused by the rising activity of a company
and recognized in different terms like sales, production of service (fees), dividend,
royalty, and rent".
While according to Subramanyam and Wild
(2011:04), "Profit represents earnings difference and advantage after
lessened by loss and burden. Profit represent one of the measurement of
activity which is calculated based on acrual accounting.” The report provides
clean profit during a period with the income profit component, burden, gains,
and loss.
Usefulness of Profit
As for usefulness of profit, according
to Sofyan Syafri Harahap (2008:23), it shall be as follows:
1. For the calculation of Iease, function as base imposition
of Iease to be accepted by the State
2. For the calculation of dividend allotted to the owners
which is to be held in the company
3. As a guide in determining investment policy and decision
making
4. As a basis in forecasting profit and also other company’s
economic needs in the future
5. As a basis in calculation and measurement of efficiency
Procedure Analysis
Research Setting
Handakkom Division of PT. Pindad
(Persero) which is located in Jl. Jend. Gatot Subroto No. 517
Bandung 40284 Indonesia. Division of Handakkom sells military weaponry like
explosives and commercials. As for the present research, it obtained the data starting
from 12 May to 12 July.
Research Design
The research method used in this final project is:
Comparative Method
According to Sugiyono, (2013:60)
"Comparative research is a research which compares one variable with two
or more different sample, or in different time". In this research, the
researcher compares two decrease methods using two independent sample between straight-line
method with double-declining balance method.
Model and Technique in
Analyzing Data
Quantitative
Analysis
Sugiyono (2012:13) stated that:
Quantitative research method can be
interpreted as a esearch method which is based on the philosophy of positivism,
used to investigate certain population or sample, the technique used to draw
the sample generally is randomization, the data are collected by using research
instrument, the data analysis is characterized quantitatively or statistically
as a mean to test hypothesis which have been specified.
In this research, quantitative analysis
is used accompanied by the data analysis of profit calculation which is influenced
by the decrease burden based on the straight-line dan double-declining
balance method. In calculating the profit which is
influencing the decrease burden, to look for the decrease burden based on the
straight-line method, the following formula can be used: [Formula]
Meanwhile, the formula which is used in the double-declining balance
method is the straight-line tariff multiplied by two. For example, the
tariff of decrease declining balance on an asset which has an estimation of the
economic benefit age of 5 year is 40%,that is twice the tariff of straight-line
which is equal to 20% (100%/5).
To prove that profit is influenced by
the decrease burden, an analysis in the form of the formula of burden decrease
is used. The analysis used is:
1. Cost to obtain
2. Residual value
3. Economic benefit age
4. Tariff
Meanwhile, to find out the mean of the profit
influenced by decrease burden, the following formula is used: [Formula]
Note:
= the amount of profit gained
= the number of year
FINDINGS
Analysis of the decrease
method of constant asset implemented in Handakkom Division of PT. Pindad
(Persero)
Calculation of Profit Using Straight-line Method
(In Million)
Description
|
2008
|
2009
|
2010
|
2011
|
2012
|
Sale
|
24.641,63
|
55.006,37
|
184.461,70
|
234.592,90
|
32.553
|
HPP
|
(19.415,54)
|
(49.438,53)
|
(171.013,70)
|
(214.466,47)
|
(20.953)
|
Gross Profit
|
5.226,09
|
5.567,84
|
13.447,99
|
20.126,43
|
11.600
|
Operational Cost
|
|||||
Selling Expense
|
(1.446,43)
|
(1.451,20)
|
(3.011,15)
|
(3.814,63)
|
(3.403)
|
Administration
|
(830,21)
|
(3.874,98)
|
(5.603,45)
|
(6.101,77)
|
(4.375)
|
Decrease Cost
|
(620,64)
|
(817,33)
|
(1.044,74)
|
(1.323,87)
|
(1.577,14)
|
Profit
|
2.328,81
|
(575,67)
|
3.788,65
|
8.886,16
|
2.245,39
|
Pursuant
to result of the above analysis, the calculation using straight-line decrease
method obtained a result of fluctuated profit from year to year. This can be
seen that in 2008 this division gained the profit equal to 2.328,81, but in
2009, it experienced a loss equal to 575,67, and in 2010, equal to 3.778,65, in
2011 equal to 8.886,16 and in 2012, it gained the profit equal to 2.245,39. In 2009,
it experienced the loss caused by the low gross profit equal to 5.567,84
compared to the operating cost which is equal to 6.143,51.
Analysis of the
decrease method of constant asset on the profit of Handakkom Division of PT.
Pindad (Persero)
Profit and Burden Decrease Difference
(In Million)
Year
|
Burden Decrease in Straight-line Method
|
Profit Based on Straight-line Method
|
Burden Decrease in Double-Declining Balance
Method
|
Profit Based on Double-Declining Balance Method
|
2008
|
620,64
|
2.328,81
|
721,10
|
2.228,35
|
2009
|
817,33
|
(575,67)
|
1114,48
|
(872,82)
|
2010
|
1.044,74
|
3.788,65
|
1569,28
|
3.264,10
|
2011
|
1.323,87
|
8.886,16
|
2127,61
|
8.082,43
|
2012
|
1.577,14
|
2.245,39
|
2634,15
|
1.188,39
|
Amount
|
5383,72
|
16.673,34
|
8166,62
|
13.890,45
|
From the
tables above, it can be seen in the comparison between straight-line decrease
method with double-declining balance decrease method. Where the decrease burden
is smaller based on the straight-line method with the amount of 5383,72
compared to the double-declining balance decrease burden which amount is
8166,62, Therefore the obtained profit is more beneficial when using
straight-line decrease method with the difference of 2782,9. It can be
concluded that straight-line decrease method is better compared the
double-declining balance decrease method.
CONCLUSION
Based on the findings of this research regarding the analysis of
comparison of the profit influenced by the decrease burden with straight-line
decrease method and double-declining balance decrease method, this is in line
with the following data analysis:
1. The amount of the profit by using straight-line decrease
method in the Division of Explosives and
Commercials Handakkom PT. Pindad (Persero) from 2008 to 2012 is 16.673,34 with
the decrease burden of 5.383,73
2. The amount of the profit by using double-declining balance
decrease method in the Division Explosives and Commercials (Handakkom) PT.
Pindad (Persero) from 2008 to 2012 deteriorated to 13.890,45 with the decrease
burden of 8.166,62
3. It is clear that straight-line decrease method is better
compared to the double-declining balance decrease method to calculate the
profit.
SUGGESTIONS
Based on the result of this research,
concerning the analysis of comparison of profit with straight-line decrease
method and double-declining balance method, the researcher attempt to give some
suggestions to following institution or organization:
1. To The Companies
A company has to pay attention in the acquirement
of the cost allocation process of the constant asset in such a way that it can
be systematically allocated during its benefit age, So that the company can
perform a rational and systematic cost allocation method at the expense of the
constant asset by paying attention to the used decrease method. Every cost
allocation will influence the company’s obtained profit, Therefore, each
company has to apply the decrease method of constant asset appropriately based
on the accounting principles which is commonly used. Based on the result of the
analysis above, Division of Handakkom has precisely used the straight-line
decrease method, because the result of the analysis of straight-line decrease method
is more effective compared to double-declining balance method.
2. To The Next Researchers
Researchers are hereinafter suggested to
consider doing some observation concerning the decrease method beforehand by
referring to the Standar Akuntansi Keuangan (SAK) because they need to find out
the changes of policy about the constant assets.
