PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments
The Group classifies financial instruments into financial assets and financial liabilities. Financial assets and liabilities are recognized initially at fair value including transaction costs. These are
subsequently measured either at fair value or amortized cost using the effective interest rate method in accordance with their classification.
i. Financial assets The Group classifies its financial assets as i financial assets at fair value through profit or
loss, ii loans and receivables, iii held-to-maturity investment or iv available-for-sale financial assets. The classification depends on the purpose for which the financial assets are
acquired. Management determines the classification of financial assets at initial recognition. Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the marketplace regular way trades are recognized on the trade date, i.e., the date that the Group commits to purchase or sell the
assets. The Group’s financial assets include cash and cash equivalents, other current financial
assets, trade receivables and other receivablesand other non-current financial assets. a. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets classified as held for trading. A financial asset is classified as held for trading if it is acquired principally for
the purpose of selling or repurchasing it in the near term and for which there is evidence of a recent actual pattern of short-term profit taking. Gains or losses arising from changes
in fair value of the trading securities are presented as other expensesincome in consolidated statements of profit or loss and other comprehensive income in the period in
which they arise.Financial asset measured at fair value through profit loss consists of derivative asset-put option which is recognized as part of “Other Current Financial Assets”
in the consolidated statements of financial position. b. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Loans and receivables consist of, among other assets, cash and cash equivalents, other current financial assets, trade and other receivables, and other non-current assets long-
term trade receivables and restricted cash. These are initially recognized at fair value including transaction costs and subsequently
measured at amortized cost, using the effective interest method. c. Held-to-maturity financial assets
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities on which management has the positive intention and ability
to hold to maturity, other than: a those that the Group, upon initial recognition, designates as at fair value through profit
or loss; b those that the Group designates as available-for-sale; and
c those that meet the definition of loans and receivables. No financial assets were classified as held-to-maturity investments as of December 31,
2016 and 2015.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated Table of Content
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
