Reference no: EM132940189

On January 1, 2020, PT Buana Ceria and PT Permata Indah agreed to work same. The cooperation agreement states the following:

1. The content of the contract is a cooperation agreement to control assets in accordance with the capital provided, while the obligations are the responsibility of the company have the most capital.
2. Decisions regarding activities must be based on the agreement of both parties.

To motivate executives to increase the market price of their shares on January 1 2020, PT Buana Ceria established a program commonly referred to as ESOP, namely executive stock options program by giving each of its 4 executives 110 option sheets stock. This option gives the right to buy 25 shares of common stock (issued by PT Buana Ceria) with an execution price of IDR 160,000 per share. It is known that the fair value an option on the grant date is $4,000. This right is granted only if the executive still working until 31 December 2024 and can be executed on 1 January 1 2025 and ends on 31 December 2025.

Problem a) In your opinion, is the cooperation agreement an appropriate joint arrangement? with PSAK 66? Explain based on the joint control assessment chart! (PSAK66: This Standard aims to establish the principles of financial reporting for entities that have an interest in a jointly controlled arrangement)

Problem b) What is the classification of the form of the joint arrangement according to the content of the cooperation agreement?

Problem c) State who determines the classification and the basis for the classification?

Problem d) Explain the category of stock options granted by PT Buana Ceria! When is the expense recognized?