Indonesian flag carrier PT Garuda Indonesia Tbk (GIAA) is not allowed to use the first half of its financial statement as a base to hold a quasi-reorganization.
Gonthor Ryantory Aziz, Head of Bureau for Assessment of Services Company at Indonesia Capital Market Supervisory Agency (Bapepam-LK), the net loss that engulfed Garuda Indonesia in the first quarter and second quarter of its financial performance has shown that the company's business outlook is not too shinny.
Due to the reasons, the capital market watchdog has not yet allowed Garuda to proceed such accounting treatment to eliminate accumulation losses.
Quasi-reorganization is an accounting treatment that under certain circumstances, a firm may eliminate a deficit in its retained earnings account by restating assets, liabilities.
As of last year, Garuda's negative retained earning reached Rp6.83 trillion, at similar level compared to that in 2006 at Rp6.59 trillion.
Disclosure: No position at the stock mentioned above.
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