NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued t. Income tax continued
The Company and its subsidiaries recognize deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date.
The Company and its subsidiaries also recognize deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax losses carried forward, to the extent
their future realization is probable. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and tax laws at each reporting date which are expected to
apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are offset in the consolidated statement of financial position, except if these are for different legal entities, in the same manner the current tax assets and
liabilities are presented.
Amendment to taxation obligations are recorded when an assessment is received or if appealed against, when the results of the appeal are determined.
u. Financial instruments
The Company and its subsidiaries classify 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 method in accordance with their classification.
i. Financial assets
The Company and its subsidiaries classify their financial assets as i financial assets at fair value through profit and loss, ii loans and receivables, iii held-to-maturity financial assets
or iv available-for-sale financial assets. The classification depends on the purpose for which the financials assets were acquired. Management determines the classification of its financial
assets at initial recognition.
The Company’s financial assets include cash and cash equivalents, available-for sale financial assets, trade receivables, other receivables, other current financial assets and 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. No financial assets were classified as
financial assets at fair value through profit or loss as of June 30, 2012 and 2011.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
i. Financial assets continued
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 things, cash and cash equivalents, trade receivables, other receivables,
other current financial assets and other non-current financial assets.
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 that management has the positive intention and ability to hold to maturity, other than:
a those that the Company upon initial recognition designates as at fair value through profit or loss;
b those that the Company 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 financial assets as of June 30, 2012 and December 31, 2011.
d. Available-for-sale financial assets Available-for-sale investments are non-derivative financial assets that are intended to be
held for indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and
receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Available for sale financial assets consist of available for sale securities which are
recorded as available-for sale financial assets.
The Company and its subsidiaries use settlement date accounting for regular purchases and sales of financial assets.
Investments in available-for-sale securities and trading securities are stated at fair value. Unrealized holding gains or losses on available-for-sale securities are excluded from
income of the current period and are reported as a separate component in the equity section until realized. Realized gains or losses from the sale of available-for-sale
securities are recognized in the consolidated statements of comprehensive income, and are determined on a specific-identification basis. A decline in the fair value of any
available-for-sale securities below cost that is deemed to be other-than-temporary and is charged to the consolidated statements of comprehensive income.
