PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
15
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements of the Company and subsidiaries co llectively referred to as “the
G roup” have been prepared in accordance with Financial Accounting Standards Standar Akuntansi
Keuangan” or “SAK including Indonesian Statement of Financial Accounting Standards Pernyataan Standar Akuntansi Keuangan
or “PSAK” and interpretation of Financial Accounting Standards Interpretasi Standar Akuntansi Keuangan
or “ISAK” in Indonesia published by the Financial Accounting Standards Board of Indonesian Institute of Accountant and Regulation No. VIII.G.7 of the
Capital Market and Financial Institution Supervisory Agency “Bapepam-LK” regarding the Presentation and Disclosure of Financial Statements of Issuers or Public Companies, enclosed in the
decision letter KEP-347BL2012.
a. Basis of preparation of financial statements
The consolidated financial statements, except for the consolidated statements of cash flows, are prepared on the accrual basis. The measurement basis used is historical cost, except for certain
accounts which are measured using the basis mentioned in the relevant notes herein. The consolidated statements of cash flows are prepared using the direct method and present the
changes in cash and cash equivalents from operating, investing and financing activities. Figures in the consolidated financial statements are presented and rounded to billions of
Indonesian rupiah “Rp”, unless otherwise stated. Accounting Standards Issued but not yet Effective
Effective January 1, 2017: Amendments to PSAK 1: Presentation of Financial Statements on Disclosure Initiative.
The amendments provide clarification on the application of the requirements of materiality, the flexibility of systematic order of the notes to the financial statements and the identification of
significant accounting policies.
PSAK 3 Adjustment 2016: Interim Financial Reporting. The PSAK provides clarification that the interim financial report is incomplete if the interim
financial statements and any disclosure incorporated by cross-reference are not made available to users of the interim financial statements on the same terms and at the same time.
If the users of the interim financial statements can not access information in cross-reference with the requirement and the same time, the interim financial statements are considered
incomplete.
PSAK 24 Adjustment 2016: Employee Benefits. The PSAK provides clarification that high-quality corporate bonds should be assessed at the
currency level and not at the country level. PSAK 58 Adjustment 2016: Non-current Assets Held for Sale and Discontinued Operations.
The PSAK provides clarification that changes in the method of disposal of an asset or disposal group are considered a continuation of the original plan of disposal. It also clarify that the
changes in the method of disposal does not change the date of classification as asset or disposal group.
PSAK 60 Adjustment 2016: Financial Instruments: Disclosures. The PSAK provides clarification that the entity must assess the nature of servicing
arrangements as provided in paragraph PP30 and paragraphs 42C to determine whether the entity has a continuing involvement in financial assets and whether the disclosure requirements
related to continuing involvement are met.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
16
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of preparation of financial statements continued
ISAK 31: Interpretation on the Scope of PSAK 13: Investment Property. The ISAK provides an interpretation of the characteristics of the building used as part of the
definition of investment property in PSAK 13: Investment Property. The building as investment property refer to structures that have physical characteristics generally associated as a building
with the walls, floors, and roofs are attached to the assets.
Effective January 1, 2018: Amendments to PSAK 2: Statement of Cash Flows on Disclosure Initiative.
These amendments require the entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
Amendments to PSAK 46: Income Taxes on Recognition of Deferred Tax Assets for Unrealised Losses.
These amendments: - Add illustrative examples to clarify that the deductible temporary differences arise when the
carrying amount of debt instruments measured at fair value and the fair value is less than the taxable base, regardless of whether the entity expects to recover the carrying amount of a
debt instrument by sale or by use, for example by holding it and collecting contractual cash flows, or a combination of both.
- Clarify that in order to assess whether taxable profits will be available against which it can utilise a deductible temporary difference, the assessment of that deductible temporary
difference carried out in accordance with tax law. - Clarify that tax reduction from the reversal of deferred tax assets is excluded from the
estimation of future taxable profit. The entity compares the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the reversal of those
deductible temporary differences to assess whether the entity has sufficient future taxable profit.
- The estimate of probable future taxable profit may include the recovery of some of an entity’s
assets for more than their carrying amount if there is sufficient evidence that it is probable that the entity will achieve this.
The following new or amended standards, that will be effective on January 1, 2018, are considered to be not applicable to the Group’s consolidated financial statements:
PSAK 69: Agriculture. Amendments to PSAK 16: Agriculture: Bearer Plants.
b. Principles of consolidation
The consolidated financial statements consist of the financial statements of the Company and the subsidiaries over which it has control. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the
Group has the power over the investee, exposure or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns.
The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins
when the Group obtains control over the subsidiary and ceases when the Group loses control over the subsidiary. Assets, liabilities, income and expenses, of a subsidiary acquired or disposed of
during the year are included in the consolidated financial statements from the date the Group gain control until the date the Group ceases to control the subsidiary.
