PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued
ix. Customer loyalty programme The Company and subsidiaries operate a loyalty point programme, which allows customers to
accumulate points for every certain multiple of the usage of telecommunication services. The points can then be redeemed in the future for free or discounted products, provided other
qualifying conditions are achieved.
Consideration received is allocated between the telecommunication services and the points issued, with the consideration allocated to the points equal to their fair value. Fair value of the
points is determined based on historical information about redemption rate of award points, Fair value of the points issued is deferred and recognized as revenue when the points are
redeemed or expired.
x. Service concession arrangements The Company and subsidiaries have implemented ISAK 16,” Service Concession
Arrangements”, which is effective starting on January 1, 2012. Based on ISAK 16, revenues relating to construction or upgrade services under a service concession arrangement are
recognized based on the stage of completion of the work performed. Operation or service revenue is recognized in the period in which the service is provided. When more than one
service is provided in the service concession arrangements, the consideration received is allocated by reference to the relative value of the services.
Further, the developed infrastructure assets under these arrangements are not recognized as property and equipment of the operator, because the contractual arrangements do not convey
the right to control the use of the public services infrastructure assets to the operator.
xi. Expenses Expenses are recognized as they are incurred.
s. Employee benefits
i. Short-term employee benefits
All short-term employee benefits which consist of salaries and related benefits, vacation pay, incentives and other short-term benefits are recognized as expense on undiscounted basis
when employees have rendered service to the Company and subsidiaries.
ii. Pension and post-retirement health care benefit plans The net obligations in respect of the defined pension benefit and post-retirement health care
benefit plans are calculated at the present value of estimated future benefits that the employees have earned in return for their service in the current and prior periods, less the fair
value of plan assets and as adjusted for unrecognized actuarial gains or losses and unrecognized past service cost. The calculation is performed by an independent actuary using
the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of
government bonds that are denominated in the currencies in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit
obligation. Government bonds are used as there is no deep market for high quality corporate bonds.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued s. Employee benefits continued
ii. Pension and post-retirement health care benefit plans continued Plan assets are assets that are held by the pension and post-retirement health care benefit
plans. These assets are measured at fair value at the end of the reporting period, which is based on the securities’ quoted market price information. The amount of prepaid pension
costs that can be recognized is limited to the total of any unrecognized past service costs, unrecognized actuarial losses and the present value of economic benefits available in the
form of refunds from the plan or reductions in future contributions to the plan.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the greater of 10 of the present value of defined benefit
obligation or 10 of the fair value of plan assets, are charged or credited to the consolidated statements of comprehensive income over the average remaining service lives of the relevant
employees. Prior service cost is recognized immediately if vested or amortized over the vesting period.
For defined contribution plans, the regular contributions constitute net periodic costs for the period in which they are due and as such are included in staff costs when they become
payable.
iii. Long Service Awards “LSA” and Long Service Leave “LSL” Employees of Telkomsel are entitled to receive certain cash awards or certain numbers of
days leave benefits based on length of service requirements. LSA are either paid at the time the employees reach certain anniversary dates during employment, or at the time of
termination. LSL is either a certain number of days leave benefit or cash, subject to approval by management, provided to employees who have met the requisite number of years of
service and with a certain minimum age.
Actuarial gains or losses arising from experience and changes in actuarial assumptions are charged immediately to the consolidated statements of comprehensive income.
The obligation with respect to LSA and LSL is calculated by an independent actuary using the projected unit credit method.
iv. Early retirement benefits Early retirement benefits are accrued at the time the Company makes a commitment to
provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when a detailed formal
plan for the early retirement cannot be withdrawn.
v. Pre-retirement benefits Employees of the Company are entitled to a benefit during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre- retirement period, the employees still receive benefits provided to active employees, which
include, but are not limited to regular salary, health care, annual leave, bonus and other benefits. Benefits provided to employees who enter pre-retirement period are calculated by an
independent actuary using the projected unit credit method.
vi. Other post-retirement benefits Employees are entitled to home leave passage benefits and final housing facility benefits to
their retirement age of 56 years. Those benefits are calculated by an independent actuary using the projected unit credit method.
