PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 20
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
g. Investments continued
iv. Other investments Investments in shares of stock with ownership interests of less than 20 that do not have
readily determinable fair values and are intended for long-term investments are carried at cost and are adjusted only for other-than-temporary decline in the value of individual investments.
Any such write-down is charged directly to income of the current year.
h. Trade and other accounts receivable
Trade and other accounts receivable are recorded net of an allowance for doubtful accounts, based upon a review of the collectibility of the outstanding amounts at the end of the year. Accounts are
written off against the allowance during the period in which they are determined to be not collectible.
Trade and other accounts receivable are recorded at the invoiced amount. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the
Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its allowance for doubtful accounts
monthly. Past due balances over 90 days for retail customers are fully provided, and past due balance for non-retail customers over a specified amount are reviewed individually for
collectibility. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not
have any off-balance sheet credit exposure related to its customers.
i. Inventories
Inventories, principally consist of components and modules, which are transferred to Property, Plant and Equipment upon use. Inventories also include Subscriber Identification Module “SIM”
card, Removable User Identity Module “RUIM” card and prepaid voucher blanks. Cost is determined using the weighted average method for components, SIM card, RUIM card and
prepaid voucher blanks, and the specific-identification method for modules. Allowance for obsolescence is primarily based on the estimated forecast of future usage of these
items.
j. Prepaid expenses
Prepaid expenses are amortized over their beneficial periods using the straight-line method.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
