PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2015 and for the Six Months Period Then Ended Unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued m. Leases continued
Leased assets are depreciated using the same method and based on the useful lives as estimated for directly acquired property and equipment. However, if there is no reasonable certainty that the
Group will obtain ownership by the end of the lease term, the leased assets are fully depreciated over the shorter of the lease term and their economic useful lives.
Lease arrangements that do not meet the above criteria are accounted for as operating leases for which payments are charged as an expense on the straight-line basis over the lease period.
n. Deferred charges - land rights
Costs incurred to process the initial legal land rights are recognized as part of the property and equipment and are not amortized. Costs incurred to process the extension or renewal of legal land
rights are deferred and amortized over the shorter of the legal term of the land rights or the economic life of the land.
o. Trade payables Trade payables are obligations to pay for goods or services that have been acquired from suppliers
in the ordinary course of business. Trade payables are classified as current liabilities if payment is due within one year or less or in the normal operating cycle of the business, if this period is longer.
If not, they are presented as non-current liabilities.
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method.
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 Statement 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.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2015 and for the Six Months Period Then Ended Unaudited
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued 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., Singapore, and Telekomunikasi Indonesia International S.A., Timor Leste whose accounting records are maintained in U.S. dollars and
Telekomunikasi Indonesia International, Pty.Ltd., Australia whose accounting records 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 statement of financial position date, 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 statement of financial position date, as follows:
June 30, 2015 December 31, 2014
Buy Sell
Buy Sell
U.S. dollar