PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Intangible assets continued
Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible assets are amortized over their useful lives. The Company and subsidiaries estimate
the recoverable value of their intangible assets. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written-down to its estimated recoverable amount.
Intangible assets are amortized using the straight-line method, based on the estimated useful lives of the assets as follows:
License Years
10 Other intangible assets
2-20 Intangible asset is derecognized when no further economic benefits are expected, neither from
further use nor from disposal. The difference between the carrying amount and the net proceeds received from disposal is recognized in the consolidated statement of comprehensive income.
l.
Property and equipment - direct acquisitions
Property and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses.
The cost of the assets includes: a purchase price, b any costs directly attributable to bringing the asset to its location and condition and c the initial estimate of the costs of dismantling and is
removing the item and restoring the site on which it is located. Each part of an item of property and equipment with a cost that is significant in relation to the total cost of the item is depreciated
separately.
Property and equipment, except land, are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows:
Years Buildings
20-40 Leasehold improvements
3-7 Switching equipment
5-15 Telegraph, telex and data communication equipment
5-15 Transmission installation and equipment
5-25 Satellite, earth station and equipment
3-20 Cable network
5-25 Power supply
3-10 Data processing equipment
3-10 Other telecommunications peripherals
5 Office equipment
2-5 Vehicles
Customer Premise Equipment “CPE” 5-8
10 Other equipment
5 Depreciation method, useful life and residual value of an asset are reviewed at least at each
financial year-end and adjusted if appropriate. The residual value of an asset is the estimated amount that the Company and subsidiaries would currently obtain from disposal of the asset, after
deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life. The Company and subsidiaries determined the
residual value of property and equipment amounting to Rp1.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued l.
Property and equipment - direct acquisitions continued
The Company and subsidiaries periodically evaluate their property and equipment for impairment, whenever events and circumstances indicate that the carrying amount of the assets may not be
recoverable. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written down to its estimated recoverable amount, which is determined based on the
higher of its fair value less cost to sell or value in use. Spare parts and servicing equipment are carried as inventory and recognized in profit or loss as
consumed. Major spare parts and stand-by equipment that are expected to be used for more than 12 months are recorded as part of property and equipment.
When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are eliminated from the consolidated statements of financial position, and the
resulting gains or losses on the disposal or sale of property and equipment are recognized in the consolidated statements of comprehensive income.
Certain computer hardware can not be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If any
computer software is independent from its computer hardware, it is recorded as part of intangible assets.
The cost of maintenance and repairs is charged to the consolidated statements of comprehensive income as incurred. Significant renewals and betterments are capitalized.
Property under construction is stated at cost until construction is completed, at which time it is reclassified to the specific property and equipment account to which it relates. During the
construction period until the property is ready for its intended use or sale, borrowing costs, which include interest expense and foreign currency exchange differences incurred on loans obtained to
finance the construction of the asset, as long as it meets the definition of qualifying assets, are capitalized in proportion to the average amount of accumulated expenditures during the period.
Capitalization of borrowing cost ceases when the construction has been completed and the asset is ready for its intended use.
Equipment temporarily unused is reclassified into equipment not used in operation and depreciated over its estimated useful life using straight-line method.
m. Leases
In determining whether an arrangement is, or contains a lease, the Company and subsidiaries perform an evaluation over the substance of the arrangement. A lease is classified as finance
lease or operating lease based on the substance, not the form of the contract. Finance lease is recognized if the lease transfers substantially all the risks and rewards incidental to the
ownership. Assets and liabilities under a finance lease are recognized in the consolidated statement of
financial position at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Any initial direct costs of the Company and subsidiaries
are added to the amount recognized as an asset.
