Revenue and expense recognition continued

F-27 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

q. Revenue and expense recognition continued

v. Revenues from network 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 telecommunications service revenues Revenues from other telecommunications services consist of Revenue-Sharing Arrangements “RSA” and sales of other telecommunication services or goods. The RSA are recorded in a manner similar to capital leases where the property and equipment and obligation under RSA are reflected in the consolidated statements of financial position. All revenues generated from the RSA are recorded as a component of revenues, while a portion of the investors’ share of the revenues from the RSA is recorded as finance costs, with the balance treated as a reduction of the obligation under RSA. Universal Service Obligation “USO” compensation from construction activities is recognized on a stage-of- completion basis. Revenues from operating and maintenance activities in respect of assets under the concession are recognized when the services are rendered. In concession contracts under USO, the Group recognizes a financial asset to the extent that it has a contractual right to receive cash or other financial assets from the Government for the construction services, where the Government has little, if any, discretion to avoid payment. The Group recognizes an intangible asset to the extent that it receives a license to charge users of the public service. Revenues from sales of other telecommunication services or goods are recognized upon completion of services and or delivery of goods 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. viii. Agency relationship Revenues from an agency relationship are recorded based on the gross amount billed to the customers when the Group acts as principal in the sale of goods and services. Revenues are recorded based on the net amount retained the amount paid by the customer less amount paid to the suppliers when, in substance, the Group has acted as agent and earned commission from the suppliers of the goods and services sold. ix. Expenses Expenses are recognized as they are incurred. F-28 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

r. Employee benefits