PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
38
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued ab. Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
The Group make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
i. Retirement benefits
The present value of the retirement benefit obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used
in determining the net cost income for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of retirement benefit obligations.
The Group determines the appropriate discount rate at the end of each reporting period. This is the interest rate that should be used to determine the present value of estimated future
cash outflows expected to be required to settle the obligations. In determining the appropriate discount rate, the Group considers the interest rates of government bonds that are
denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit obligations.
If there is an improvement in the ratings of such government bonds or a decrease in interest rates as a result of improving economic conditions, there could be a material impact on the
discount rate used in determining the post-employment benefits obligations. Other key assumptions for retirement benefit obligations are based in part on current market conditions.
Additional information is disclosed in Notes 34, 35 and 36.
ii. Useful lives of property and equipment
The Group estimate the useful lives of their property and equipment and intangible assets based on expected asset utilization, considering strategic business plans, expected future
technological developments and market behavior. The estimates of useful lives of property and equipment are based on the Group’s collective assessment of industry practice, internal
technical evaluation and experience with similar assets.
The Group review estimates of useful lives at least each financial year end and are updated if expectations differ from previous estimates due to physical wear and tear, technical or
commercial obsolescence and legal or other limitations on the use of the assets. The amounts and timing of recorded expenses for any year will be affected by changes in these factors and
circumstances. A change in the estimated useful lives of the property and equipment is a change in accounting estimates and is applied prospectively in profit or loss in the period of
the change and future periods.
Details of the nature and carrying amount of property and equipment are disclosed in Note 11.
iii. Provision for impairment of receivables
The Group assesses whether there is objective evidence that trade receivables have been impaired at the end of each reporting period. Provision for impairment of receivables is
calculated based on a review of the current status of existing receivables and historical collection experience. Such provisions are adjusted periodically to reflect the actual and
anticipated experience. Details of the nature and carrying amount of provision for impairment of receivables are disclosed in Note 6.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
39
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued ab. Critical accounting estimates and judgments continued
iv. Income taxes
Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The
Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the year in which such determination is made. Details of
the nature and carrying amount of income tax are disclosed in Note 31.
v. Impairment of non-financial assets
The Group annually assesses whether goodwill is impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit is determined based on the higher of its fair value less costs to
sell and its value in use, calculated on the basis of management’s assumptions and estimations.
The Group determines the estimated recoverable amount based on the future cash flows projections from the continuing use of the asset and the net cash flows to be received for the
disposal of an asset at the end of its useful life. Those projections are estimated for the asset in its current condition and not included future cash flows that are expected to arise from a
future restructuring to which the Group is not yet committed and improving or enhancing the asset’s performance.
The assessment of recoverable amount is sensitive to the management’s judgments in establishing forecasts of future cash flows. These judgments are applied based on our
understanding of historical and current information, and expectations of the Group’s future plan and performance. Further details are presented in Note 11.
3. BUSINESS COMBINATIONS a. Acquisitions
Acquisition of PT German Center Indonesia On January 17, 2013, Sigma signed a sales and purchase of shares agreement and transfer of
debt with Landeskreditbank Baden-Wurttemberg-Forderbank “L-Bank” and Step Stuttgarter Engineering Park Gmbh “STEP” as the shareholders of PT German Centre Indonesia “GCI”.
Further, on April 30, 2013, Sigma has bought all shares owned by L-Bank and STEP in GCI. Through this acquisition, Sigma enlarged its data center capacity that can be offered to its
customers.
Acquisition of Patrakom On September 25, 2013, based on notarial deed No. 22 of Ashoya Ratam, S.H.,M.Kn, the
Company entered into a Sales and Purchase Agreement SPA with PT ELNUSA Tbk to acquire 40 ownership in Patrakom for Rp45.6 billion. As a result, the Company’s ownership in Patrakom
increase from 40 to 80 Note 10.
Further, on November 29, 2013, based on notarial deed No. 54 of Ashoya Ratam, S.H., M.Kn., dated November 29, 2013 the Company has signed a SPA with PT Tanjung Mustika Tbk to
acquire the remaining of 20 ownership in Patrakom for Rp24.8 billion.
