Hello everyone. Today I’d like to post an example of English for Specific Purposes translation which I translated a couple of y...

Example of Economic Journal Translation






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 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.