Leases SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued l.

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011 Figures in tables are presented in billions of Rupiah, unless otherwise stated 26 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued ii. Cellular and fixed wireless telephone revenues continued · Sales of pulse reload vouchers either bundled in starter packs or sold as separate items are recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added services used by the subscribers or the expiration of the unused stored value of the voucher. · Unutilized promotional credits are netted against unearned income. iii. Interconnection revenues The revenues from network interconnection with other domestic and international telecommunications carriers are recognized monthly on the basis of the actual recorded traffic for the month. Interconnection revenues consist of revenues derived from other operators’s subscriber calls to the Company and subsidiary operator’s subscribers incoming and calls between subscribers of other operators through the Company and subsidiary’s network transit. iv. Data, internet and information technology services revenues Revenues from data communication and internet are recognized based on service activity and performance which is measured by duration of internet usage or based on the fixed amount charges depending on the arrangements with customers. Revenues from sales, installation and implementation of computer software and hardware, computer data network installation service and installation are recognized when the goods are delivered to customers or the installation takes place. Revenue from computer software development service is recognized using the percentage of completion method. v. Revenues from network Revenues from network consist of revenues from leased lines and satellite transponder leases which are recognized over the period in which the services are rendered. vi. Other telecommunications services revenues Revenues from other telecommunications services consist of Revenue-Sharing Arrangements “RSA” and sales of other telecommunication services or goods. The RSA are recorded in a manner similar to capital leases where the property and equipment and obligation under RSA are reflected in the consolidated statements of financial position. All revenues generated from the RSA are recorded as a component of revenues, while a portion of the investors’ share of the revenues from the RSA is recorded as finance costs with the balance treated as a reduction of the obligation under RSA. Universal Service Obligation “USO” compensation from construction activities to design, build and finance assets for the grantor are recognized on a stage of completion basis. Revenues from operating and maintainance activities in respect of the assets under the concession are recognized when the services are rendered. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2012 AND FOR THE YEAR THEN ENDED WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2011 AND FOR THE YEAR THEN ENDED AND AS OF JANUARY 1, 2011 Figures in tables are presented in billions of Rupiah, unless otherwise stated 27 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued vi. Other telecommunications services revenues continued In concession contract under USO, the Company and subsidiaries have contractual rights to receive considerations from the grantor. The Company and subsidiaries recognize a financial asset in its consolidated statements of financial position, in consideration for the services it provides designing, building, operation or maintenance assets under concession. Such financial assets are recognized in the consolidated statements of financial position as Account Receivables, for the amount of the fair value of the infrastructure on initial recognition and subsequently at amortized cost. The receivable is settled by means of the grantor’s payments received. The financial income calculated on the basis of the effective interest rate is recognized as financing income. Revenues from sales of other telecommunication services or goods are recognized upon completion of services and or delivery of goods to customers. vii. Multiple-element arrangements Where two or more revenue-generating activities or deliverables are sold under a single arrangement, each deliverable that is considered to be a separate unit of accounting is accounted for separately. The total revenue is allocated to each separately identifiable component based on the relative fair value of each component and the appropriate revenue recognition criteria are applied to each component as described above. viii. Agency relationship Revenues from an agency relationship are recorded based on the gross amount billed to the customers when the Company and subsidiaries acted as principal in sale of goods and services. Revenues are recorded based on the net amount retained the amount paid by the customer less with amount paid to the suppliers because in substance, the Company and subsidiaries has acted as an agent and earned commission from the suppliers of the goods and services sold. 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, The fair value of the points issued is deferred and recognized as revenue when the points are redeemed or expired. x. Expenses Expenses are recognized as incurred on the accrual basis.