PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2008 AND 2009,
AND SIX MONTHS PERIOD ENDED JUNE 30, 2008 AND 2009 Figures in tables are presented in millions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued j.
Intangible assets continued
In 2006, Telkomsel was granted the right to operate the 3G license Note 14.iii. Telkomsel is required to pay an up-front fee and annual rights of usage “Biaya Hak Penggunaan” or “BHP”
fee for the next ten years Note 48c.ii. The up-front fee is recorded as intangible asset and amortized using the straight-line method over the term of the right to operate the 3G license
10 years. Amortization commenced in 2006 when the assets attributable to the provision of the related services became available for use.
Based on management interpretation of the license conditions and the written confirmation from the DGPT, the license may be returned at any time without any financial obligation to pay the
remaining outstanding annual BHP fees. Accordingly, Telkomsel recognizes the annual BHP fees as expense when incurred. Management evaluates its plan to continue to use the license on an
annual basis.
k. Property, plant and equipment - direct acquisitions
Since January 1, 2008, the Company and its subsidiaries has adopted PSAK 16 Revised 2007, “Property, Plant and Equipment” “PSAK 16R”, which became effective for financial statement
periods beginning on or after January 1, 2008 and is applied prospectively.
According to PSAK 16R, an entity should choose either the cost model or the revaluation model in measuring the costs of the assets. The Company has decided to use the cost model. Further,
the cost of the assets include: 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
removing the item and restoring the site on which it is located. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be
depreciated separately. The residual value and the useful life of an asset should be reviewed at least at each financial year-end.
Property, plant and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses.
Property, plant 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 Leasehold improvements
3-7 Switching equipment
5-15 Telegraph, telex and data communication equipment
5-15 Transmission installation and equipment
5-20 Satellite, earth station and equipment
3-15 Cable network
5-25 Power supply
3-10 Data processing equipment
3-10 Other telecommunications peripherals
5 Office equipment
2-5 Vehicles
5-8 Other equipment
5
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2008 AND 2009,
AND SIX MONTHS PERIOD ENDED JUNE 30, 2008 AND 2009 Figures in tables are presented in millions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Property, plant and equipment - direct acquisitions continued
Pursuant to PSAK 16R, starting January 1, 2008, the Company has changed the estimated useful lives of fiber optic included in cable network assets from 15 years to 25 years. The Company
charged the impact of the changes in the estimated useful lives to the current period consolidated financial statements as it is not considered material.
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 upon the greater of
its net selling price 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 more than 12 months are recorded as part of property, plant and equipment.
When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are eliminated from the consolidated financial statements, and the resulting gains or
losses on the disposal or sale of property, plant and equipment are recognized in the consolidated statement of 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 shall be recorded as part of intangible assets.
The cost of maintenance and repairs is charged to statements of 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, plant and equipment account to which it relates. During the
construction period, borrowing costs, which include interest expense and foreign currency exchange differences incurred to finance the construction of the asset, 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 are reclassified into equipment not used in operation and depreciated over their estimated useful life using straight-line method.
l. Property, plant and equipment under finance leases
