Inventories SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued g. Trade and other receivables

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the three month periods Ended March 31, 2017 and 2016 unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 20

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Intangible assets continued

Intangible assets except goodwill are amortized using the straight-line method, based on the estimated useful lives of the intangible assets as follows: Years Software 3-6 License 3-20 Other intangible assets 1-30 Intangible assets are derecognized on disposal, or when no further economic benefits are expected, either from further use or from disposal. The difference between the carrying amount and the net proceeds received from disposal is recognized in the consolidated statements of profit or loss and other comprehensive income.

l. Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of an item of property and equipment 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 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 rights, are depreciated using the straight-line method based on the estimated useful lives of the assets as follows: Years Buildings 15-40 Leasehold improvements 2-15 Switching equipment 3-15 Telegraph, telex and data communication equipment 5-15 Transmission installation and equipment 3-25 Satelite, earth station and equipment 3-20 Cable network 5-25 Power supply 3-20 Data processing equipment 3-20 Other telecommunication peripherals 5 Office equipment 2-5 Vehicles 4-8 Customer Premises Equipment “CPE” asset 4-5 Other equipment 2-5 Significant expenditures related to leasehold improvements are capitalized and depreciated over the lease term. The 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 Group would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset is already of the age and in the condition expected at the end of its useful life. Property and equipment acquired in exchange for a non-monetary asset or for a combination of monetary and non-monetary assets are measured at fair value unless, i the exchange transaction lacks commercial substance; or ii the fair value of neither the asset received nor the asset given up is reliably measurable.