PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of March 31, 2014 and for three months period then ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
49
11. PROPERTY AND EQUIPMENT continued
a. Gain on disposal or sale of property and equipment
2014 2013
Proceeds from sale of property and equipment 1
- Net book value
- -
Gain on disposal or sale of property and equipment
1 -
b. Assets impairment i
As of December 31, 2013, the CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. As of December 31, 2013, there were indications
of impairment in the fixed wireless CGU presented as part of personal segment, which were mainly due to increased competition in the fixed wireless market that resulted in lower
average tariffs, declining active customers and declining Average Revenue Per User “ARPU”. The Company assessed the recoverable value of the assets in the CGU and
determined that assets for the fixed wireless CGU were impaired by Rp596 billion and Rp30 billion as at December 31, 2013 and March 31, 2014, which is recognized in the
consolidated statement of comprehensive income under “Depreciation and amortization”. The recoverable amount has been determined based on value-in-use VIU calculations.
These calculations used pre-tax cash flow projections approved by management covering a five-year period and with cash flows beyond the five-year period extrapolated using a
perpetuity growth rate. The cash flow projections reflect management’s expectations of revenue, Earnings Before Interest, Tax, Depreciation and Amortization “EBITDA” growth
and operating cash flows on the basis that the fixed wireless CGU generates positive net cash flows starting from 2014. Management’s cash flow projection also incorporates
management’s reasonable expectations for developments in macro economic conditions and market expectations for the Indonesian telecommunications industry. As of December 31,
2013, management applied a pre-tax discount rate of 13.5 derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. As
of December 31, 2013, the perpetuity growth rate used of 0, assumes that subscriber numbers and average revenue per user may continue to decrease after five years.
If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required
to assess whether there will be further impairment next year. ii Management believes that there is no indication of impairment in the value of other CGUs as
of December 31, 2013. c. Others
i Interest capitalized to property under construction amounted Rp9 billion and
Rp100 billion for three months period ended March 31, 2014 and for the year ended December 31, 2013, respectively. The capitalization rate used to determine the amount of
borrowing costs eligible for capitalization ranges from 9.75 to 13.07 and from 9.75 to 13.07 for three months period ended March 31, 2014 and for the year ended
December 31, 2013, respectively.
ii No foreign exchange loss was capitalized as part of property under construction for for three months period ended March 31, 2014 and for the year ended December 31, 2013.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of March 31, 2014 and for three months period then ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
50
11. PROPERTY AND EQUIPMENT continued
