Archive for July, 2015

Scenario Planning: Why China plunges its big fund to Indonesia?

July 13, 2015

According to some news, Jokowi Government (SOE Ministry) borrow big fund from China (China Development Bank) to financing infrastructure and State Owned Enterprise’s projects.

The amount of loan is $20million, the $10 million is aimed to financing 35,000 MW power plant projects and the rest is aimed for 16 infrastructures projects.

The financing from China Banks as consequence will pull in the others China companies to involve in business as partner, vendors (suppliers), or subcontractors. Meanwhile, the quality of China product or services known as second class or not in the best position.

In another factor, its emerge big questions? Why Indonesia did not borrow loan from West countries or Japan? Or from Rich Arabian countries?

As we know, borrowing much money must consider the interest rate. Is the interest rate offered by China Bank lower than Others?

Focal issues:
How Indonesia develop its infrastructures and industry in 15 years? How Indonesia prepare its development in the Global uncertainty?

Range of Time: 15 years (2030)

Finding Driving Forces:
Using PESTLE analysis, etc.

The driving forces:
– China economic growth
– China military power
– China political factors
– Indonesia economic growth
– China product and services quality
– Indonesia human competition index
– China population growth
– Indonesia Population growth
– Etc
Selecting the three of most crucial driving forces as axes matrix:

POSSIBLE SCENARIO 1, 2,3,4
1. Indonesia as developed country with strong relationship with China (both business and military) (Garuda brings Dragon to fly)
2. Indonesia still under developed country as backbone of China. (Garuda brought by Dragon)
3. Indonesia under China’s cooptation in Business (Garuda under Dragon)
4. Indonesia under China cooptation both in Business and politics. (Garuda swirled by Dragon)

So how its impact to us? what should to be prepared? should we learn Mandarin starting from now?? hihi

Impact of The Decline of China Economic Growth to Indonesia

July 10, 2015

After Greek bankruptcy, According the some news, the China economic growth is declining, moreover the stock index at China market is falling down.

It annoys me to know deeply about what happening in China and what the impact will affluence to Indonesia business environment, especially to my company business.

According to the Central bank governor, Agus Marto said that the declining 1% of China economic growth will impact the declining about 0,4% of Indonesia economic growth.

The big questions are why does China economic growth decline? And why have impact to Indonesia? And is it have impact to my company business?

P1-BS532_CHINAG_16U_20150119220313

the China economic slowdown mainly caused by slowdown of fixed assets investment especially real estate and manufacturing investment. This condition has impact to Indonesia which is the largest exporter to China in coal fired and crude palm oil. The exports of those commodities is fall both quantity and price. Meanwhile the tumbling of China stock caused by rush out of investors worrying about bubble on stock market where mostly investors buy stock with borrowing money. When the stock price drops, they quickly sell their stock in order to pay the loan.

Meanwhile,this condition more specifically impacts to the certain business in Indonesia. The company which rely on import from China such as in steel and construction Industry will got cheaper products. Because china will do everything in order to boost their economic growth, while their domestic demand is declining. On the other hand, the china electronic product also will sold cheaper.

But there are another factor which still hold up the china product price, It is dollar. When the transactions still using dollar rather than Yuan, the impact of China price down is not so significant. It because the Rupiah is still weak against dollars.
(my private analyst)

IFRS 1 – How to Present the financial statement

July 9, 2015

IFRS 1 is the basic or framework for other standards under IFRS. Accountant must prepare and present the financial report based on this rule.

The first IFRS was released effectively on January 2004. Before that the accountants at UK used IAS 1 as guidance.

In Indonesia, the presentation of financial statement was ruled on PSAK 1 which adopt from IFRS starting from 2012.

Accountant must understand deeply the IFRS 1 in order to stave off the fundamental mistake in their financial report. By understanding the IFRS 1, they will not make a buoyed the financial statement but strictly based on standard.

Hereby the essence of IFRS 1:
– The objective  1). The financial statements is transparent for users and comparable over all periods, 2). Provide a suitable starting point for accounting accordance with IFRS, and 3). Can be generated at cost that does not exceed the benefit.

– General Principle:
a. Recognition and measurement
• Financial statement consist of : 1)financial position ( previous: balance sheet), 2). Statement of profit (loss) and other comprehensive income, 3).Statement of cash flow, 4).Statement of change in equity and 5) related notes, including comprehensive information.
• Financial assets & liabilities  fair value or amortized cost
b. Disclosure
See detail at:
http://www.iasplus.com/en/standards/ifrs/ifrs1

So, if you see a financial statement that have no 5 statements above and not be measured by fair value or amortized cost for its assets, we can conclude the that financial statement is not properly presented according to IFRS. Simple right?

IFRS.. what??

July 7, 2015

Finally, I start to write about IFRS. What is that? IFRS is international standard which regulate about how to present financial statement properly.

The complete definition IFRS=International Financial Reporting Standard.

Applying the IFRS in Indonesia was started on 2012. The Indonesian financial accounting standard or PSAK (pernyataan standar akuntansi keuangan) starting from that year gradually adopt the IFRS standards.

Those alternation from old PSAK to IFRS need some clausal changes because previously Indonesia took US GAAP as reference. Some US GAAP has different clausal with IFRS which is originated from London (Anglo Accounting pole).

Actually, what is my purpose to write IFRS? Just to update my knowledge in order to no easy forgotten because I am an accountant. It is my responsibility to concern about my basic knowledge and share to anyone who interest in.

Lets start to IFRS 1. (next post)

The Scenario Planning “ the open strategy”

July 7, 2015

Do you know scenario planning (SC)? Its sounds familiar ya? According to the dictionary, the word “scenario” mean narrative plot. Meanwhile planning means preparation program or steps to do in future.

Scenario planning as science or knowledge, actually coming from military strategy. Its develop by US military in 1940’an to anticipate the various condition in the battle.

Furthermore, the usage of scenario planning is expanded to the business worlds. Its developed from 1970 when shell Petroleum use it as their business strategy tool.For those condition, some prominent scholars emerge as scenario planning experts. Some names such as Peter Schwartz, Paul J.H Shoemaker, Gill Ringland, Mat Lindgren,Hans Bandhold, and also Woody Alan, Adam Kahane, and also Thomas J. They immerse to be SC consultant and becoming popular experts on scenario planning worlds.

I am as personally, interest in scenario planning knowledge because its developing our imagination about future condition.

So what are the definition of SC according to the scholar?
Peter Schwartz said “ SC is at tool (for) ordering one’s perceptions about alternative future environment in which one’s decision might be play out”. Meanwhile the Gill Ringland said SC as the part of strategic planning which relates to the tools and technologies for managing the uncertainties of the future.

The SC tool is effective to find alternative strategy for long period, however the Projection tool is more effective to be applied in imminent situation. Combining projection and SC tool will guide the company having robust strategy in order avoiding plunge into worst condition.

There are some step to develop scenario planning.
Step 1 is by determined the focal issues which enclose the business.
Step 2 is by analyzing the macro environment by PESTLE Analysis etc
Step 3 is by analyzing the specific industry where the company actively in business.
Step 4 is by analyzing the internal company itself by SWOTH or Risk analysis.
After conducting those steps above, finally we will conclude the driving forces from every aspects as result of those analysis.
Step 5 is selecting the driving force to find the most critical driving forces. From those critical driving forces. The critical driving forces are coming from the most impact and the most uncertain forces that might be happen in the future.

After all of above steps.we can develop the various scenarios. And for the end, we must prepare the strategic implication from each scenario by preparing the strategic option to mitigate all of the scenario consequences.
Below the interest topic of scenarios:
– Scenario Indonesia 2030
– Scenario ASEAN 2030
– Scenario of the world 2050..
– Scenario of Jakarta 2030..
We can develop all of the scenario in this world, including your life scenarios. So lets try to develop our scenario..!!

Crash of Old Military Plane

July 2, 2015

The current news yesterday shocked me, on 1 July 2015 the Hercules fell down in Ginting Street near Medan not far away from Suwondo Airbase. The Hercules loaded 9 crew and 102 passenger according its manifest. Nobody survive.. all dead. The passenger were military personnel from PasKhas (Air force special Wing) and civilians.

According to the Airbase control officer, the Hercules pilot tried to contact the airbase control after taking off for return request.

Base on investigation, the crash Hercules is old plane. It was built in 1964 by its Manufacturer. According to data, up to now the Indonesia Air force has 24 Hercules with 10 active in services.
Observers said that the crash of the plane because old factors, and other hand caused by over capacity of loading. The other observer said the civilians joint the Hercules flying by paying some money to the “Calo”.

The President Jokowi said deep condolence to the victim families, and instructed the minister of defense and Military Chief to investigate the tragedy also evaluate all of the military transport equipment.

Evaluation:
Old plane need more maintenance cost, or should be grounded.
Military flying need evaluate system to prevent overcapacity and misuse.
Future planning  military aircraft maintenance and need planning, how many aircraft should Indonesia have? Buy new? And how to maintenance?