PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
124
55. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDONESIAN GAAP AND
U.S. GAAP continued 1 Description of differences between Indonesian GAAP and U.S. GAAP continued
d. Interest capitalized on assets under construction Under Indonesian GAAP, qualifying assets, to which interest cost can be capitalized, should
be those that take a minimum of 12 months to get ready for their intended use or sale. To the extent that funds are borrowed specifically to finance the construction of a qualifying asset,
the amount of the interest cost eligible for capitalization on that asset should be determined based on the actual interest cost incurred on that borrowing during the period of construction
less any investment income on the temporary investment of those borrowings.
Under U.S. GAAP, there is no minimum limit i.e. a minimum 12-month construction period requirement on the length of the construction period in which the interest cost could be
capitalized. The amount of interest cost to be capitalized for qualifying assets is intended to be that portion of the interest cost incurred during the construction periods that theoretically
could have been avoided if expenditures for the assets had not been made. The interest cost need not arise from borrowings specifically made to acquire the qualifying assets. The
amount capitalized in a period is determined by applying an interest rate to the average amount of accumulated expenditures for the assets during the period. Interest income arising
from any unused borrowings is recognized directly as income in the consolidated statement of income.
e. RSA Under Indonesian GAAP, property, plant and equipment built by an investor under RSA are
recognized as property, plant and equipment under RSA in the accounting records of the party to whom ownership in such properties will be transferred at the end of the revenue-
sharing period, with a corresponding initial credit to unearned income. The property, plant and equipment are depreciated over their useful lives, while the unearned income is
amortized over the revenue-sharing period. The Company records its share of the revenues earned, net of amounts due to the investors.
Under U.S. GAAP, the RSA are recorded in a manner similar to capital leases where the property, plant and equipment and obligation under RSA are reflected on the consolidated
balance sheet. All the revenues generated from the RSA are recorded as a component of operating revenues, while a portion of the investors’ share of the revenues from the RSA is
recorded as interest expense with the balance treated as a reduction of the obligation under RSA.
f. Employee benefits The Company and its subsidiaries adopted PSAK 24 Revised 2004 in accounting for the
costs of pension benefit, post-retirement health care benefit and other post-retirement benefits for Indonesian GAAP purposes.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
125
55. SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDONESIAN GAAP AND
U.S. GAAP continued 1 Description of differences between Indonesian GAAP and U.S. GAAP continued
f. Employee benefits continued The differences between the accounting for the pension benefits, post-retirement health care
benefits and other post-retirement benefits under Indonesian GAAP and U.S. GAAP are as follows:
i. Prior service cost
Under Indonesian GAAP, the prior service cost is recognized immediately if vested or amortized on a straight-line basis over the average period until the benefits become
vested. The amortized amount is recorded as a component of net periodic benefit cost for the year.
Under U.S. GAAP, the prior service cost vested and non-vested benefits is deferred and amortized systematically over the estimated remaining service periods for active
employees and the recognized amount is recorded in the consolidated statement of income.
ii. Transition obligations relating to pension and post-retirement healthcare benefits Under Indonesian GAAP, the transition obligations were recognized on January 1, 2004,
the date PSAK 24 Revised 2004 was adopted. Under U.S. GAAP, the transition obligations arising from the adoption of Statement of
Financial Accounting Standards “SFAS” 87 “Employers’ Accounting for Pensions” on January 1, 1992 and SFAS 106 “Employers’ Accounting for Postretirement Benefits
Other Than Pensions” on January 1, 1995, were deferred and amortized systematically over the estimated remaining service periods for active employees and 20 years,
respectively. In addition, different adoption dates resulted in significant difference in cumulative unrecognized actuarial gains and losses.
iii. Minimum liability Under Indonesian GAAP, recognition of a minimum liability for the pension plans is not
required. Under U.S. GAAP, up to December 31, 2005 the Company and its subsidiaries
recognized an additional minimum liability when the accumulated benefits obligation exceeded the fair value of the plan assets with the equal amount recognized as an
intangible asset, provided that the asset recognized did not exceed the amount of unrecognized prior service costs. If the additional liability required to be recognized
exceeds unrecognized prior service costs, the excess was reported in accumulated other comprehensive income, net of tax.
