PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued SEPTEMBER 30, 2005 AND 2006, AND FOR THE NINE MONTHS PERIOD ENDED
SEPTEMBER 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 21
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
l. Property, plant and equipment under capital leases
Property, plant and equipment acquired under capital leases are stated at the present value of minimum lease payments plus residual value option price should be paid at the end of lease
period. At inception of the lease, a corresponding liability, which equals to the present value of minimum lease payments, is also recorded and subsequently reduced by the principal component
of each minimum lease payment. The interest component of each minimum lease payment is recognized in the statement of income.
Leased assets are capitalized only if all of the following criteria are met: a the lessee has an option to purchase the leased asset at the end of the lease period at a price agreed upon at the
inception of the lease agreement, and b the sum of periodic lease payments, plus the residual value, will cover the acquisition price of the leased asset and related interest, and c there is a
minimum lease period of at least 2 years. Leased assets are depreciated using the same method and over the same estimated useful lives used
for directly acquired property, plant and equipment.
m. Revenue-sharing arrangements
The Company records assets under revenue-sharing agreements as “Property, plant and equipment under revenue-sharing arrangements” with a corresponding initial credit to “Unearned income on
revenue-sharing arrangements” presented in the Liabilities section of the balance sheet based on the costs incurred by the investors as agreed upon in the contracts entered into between the
Company and the investors. Property, plant and equipment are depreciated over their estimated useful lives using the straight-line method.
Unearned income related to the acquisition of the property, plant and equipment under revenue- sharing arrangements is amortized over the revenue-sharing period using the straight-line method.
At the end of the revenue-sharing period, the respective property, plant and equipment under revenue-sharing arrangements are reclassified to the “Property, plant and equipment” account.
Revenue earned under revenue-sharing arrangements is recognized on the basis of the Companys share as provided in the agreement.
n. Joint operation
