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
25
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued o. Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. 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 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.
q. Foreign currency translations The functional currency and the recording currency of the Company and subsidiaries 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. 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 assetsand liabilitiesdenominated 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:
March 31, 2014 December 31, 2013
Buy Sell
Buy Sell
United States dollar “US” 1 11,355
11,365 12,160 12,180
Euro 1 15,564
15,581 16,744 16,774
Yen 1 111.15
111.26 115.67 115.87
The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statement of comprehensive income of the current year, except for foreign
exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction of those
qualifying assets Note 2l.
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
26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition
i. Fixed line telephone revenues
Revenues from fixed line installations, including incremental costs, are deferred and recognized as revenue and costs over the expected term of the customer relationships. Based
on reviews of historical information and customer trends, the Company determined the expected term of the customer relationships in 2014 and 2013 to be 18 years, respectively.
Revenues from usage charges are recognized as customers incur the charges. Monthly subscription charges are recognized as revenues when incurred by subscribers.
ii. Cellular and fixed wireless telephone revenues Revenues from postpaid service, which consist of usage and monthly charges, are recognized
as follows: •
Airtime and charges for value added services are recognized based on usage by subscribers.
• Monthly subscription charges are recognized as revenues when incurred by subscribers.
Revenues from prepaid card subscribers, which consist of the sale of starter packs also known as SIM cards in the case of cellular and RUIM in the case of fixed wireless
telephone and start-up load vouchers and pulse reload vouchers, are recognized as follows: •
Sales of SIM and RUIM cards are recognized as revenue upon delivery of the starter packs to distributors, dealers or directly to customers.
• Sales of pulse reload vouchers either bundled in starter packs or sold as separate items
are recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added
services used by the subscribers or the expiration of the unused stored value of the voucher.
• Unutilized promotional credits are netted against unearned income.
iii. Interconnection revenues The revenues from network interconnection with other domestic and international
telecommunications carriers are recognized monthly on the basis of the actual recorded traffic for the month. Interconnection revenues consist of revenues derived from other operators’
subscriber calls to the Company and subsidiaries’subscribers incoming and calls between subscribers of other operators through the Company and subsidiaries’ network transit.
iv. Data, internet and information technology service revenues Revenues from data communication and internet are recognized based on service activity and
performance which are measured by the duration of internet usage or based on the fixed amount of charges depending on the arrangements with customers.
Revenues from sales, installation and implementation of computer software and hardware, computer data network installation service and installation are recognized when the goods are
delivered to customers or the installation takes place.
Revenue from computer software development service is recognized using the percentage-of- completion method.
