PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued p. Borrowings
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds net of transaction
costs and the redemption value is recognized in the consolidated statements of profit or loss and other comprehensive income over the period of the borrowings using the effective interest method.
Fees paid on obtaining loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred
until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facilities will be drawn down, the fee is capitalized as a pre-payment for liquidity services and
amortized over the period of the facilities to which it relates.
q. Foreign currency translations The functional currency and the recording currency of the Group are both the Indonesian rupiah,
except for the functional currency of Telekomunikasi Indonesia International Pte. Ltd., Hong Kong, Telekomunikasi Indonesia International Pte. Ltd., Singapore, Telekomunikasi Indonesia
International Inc., USA and Telekomunikasi Indonesia International S.A., Timor Leste whose functional currency is maintained in U.S. dollars and Telekomunikasi Indonesia International, Pty.
Ltd., Australia whose functional currency is maintained in Australian dollars. Transactions in foreign currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction
date. At the consolidated statements of financial position dates, monetary assets and liabilities denominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell
rates quoted by Reuters prevailing at the consolidated statements of financial position dates, as follows in full amount:
June 30, 2017 December 31, 2016
Buy Sell
Buy Sell
U.S. dollar “US” 1
13,325 13,330
13,470 13,475
Australian dollar “AU” 1
10,055 10,061
9,721 9,726
Euro 1 14,879
14,890 14,170
14,181 Yen 1
119.94 120.00
115.01 115.10
The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statements of profit or loss and other comprehensive income of the current year,
except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction
of those qualifying assets Note 2l.
r. Revenue and expense recognition
i. Cellular and fixed wireless telephone revenues
Revenues from postpaid service, which consist of usage and monthly charges, are recognized as follows:
Airtime and charges for value added services are recognized based on usage by subscribers.
Monthly subscription charges are recognized as revenues when incurred by subscribers. Revenues from prepaid service, which consist of the sale of starter packs also known as SIM
cards and start-up load vouchers and pulse reload vouchers, are recognized initially as unearned income and recognized as revenue based on 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.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition
ii. Fixed line telephone revenues Revenues from usage charges are recognized as customers incur the charges. Monthly
subscription charges are recognized as revenues when incurred by subscribers. Revenues from fixed line installations are deferred and recognized as revenue on the straight-
line basis over the expected term of the customer relationships. Based on reviews of historical information and customer trends, the Company determined the term of the customer
relationships is 18 years.
iii. Interconnection revenues 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 operato
rs’ subscriber calls to t
he Group’s subscribers incoming and calls between subscribers of other operators through t
he Group’s network transit. iv. Data, internet, and information technology service revenues
Revenues from data communication and internet are recognized based on service activity and performance which are measured by the duration of internet usage or based on the fixed
amount of 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. Network revenues 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 revenues
Revenues from sales of handsets or other telecommunications equipments are recognized when delivered to customers.
Revenues from telecommunication tower leases are recognized on straight-line basis over the lease period in accordance with the agreement with the customers.
Revenues from other services are recognized when services are rendered 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.
