Basis for preparation of the consolidated financial statements

PT XL AXIATA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Page 14

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

d. Recognition of revenues and expenses continued Changes in presentation of interconnection revenue continued 31032009 Before restatement Revenue net of interconnection and telecommunications service charges 2,403,856 Operating expenses 2,178,577 After restatement Gross revenue net of discount 2,902,203 Operating expenses 2,676,924

e. Trade receivables

Trade receivables are presented at their estimated recoverable amount after an allowance for doubtful accounts. This allowance for doubtful accounts is made based on the management’s evaluation of the collectibility of outstanding amounts. Accounts are written off in the period during which they are determined to be uncollectible.

f. Inventories

Inventories, mainly comprising vouchers and SIM cards, are valued at the lower of cost or net realisable value. Cost is calculated using the moving-average method. A provision for obsolete and slow-moving inventory is determined on the basis of the estimated future sales of individual inventory items.

g. Leases

In 2007, DSAK issued PSAK 30 Revised 2007, “Leases”, which constituted a change in accounting policy. The PSAK is effective for the preparation of financial statements covering periods beginning on or after 1 January 2008. Under the PSAK 30 Revised 2007, the classification of leases is based on the extent to which risks and rewards incidental to ownership of a leased asset lie with the lessor or the lessee. In 2008, DSAK issued an Interpretation of Statement of Financial Accounting Standard ISAK 8, “Determining whether an Arrangement contains a Lease and Further Explanation about Transitional Provisions of PSAK 30 Revised 2007”. i As lessee Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the consolidated statement of income on a straight-line basis over the period of the lease. PT XL AXIATA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2007, 2008 AND 2009; AND 31 MARCH 2009 AND 2010 Expressed in millions of Rupiah, unless otherwise stated Page 15

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued