PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Property, plant and equipment - direct acquisitions continued
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 until the property is ready for its intended use or sale, 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 is reclassified into equipment not used in operation and depreciated over their estimated useful life using straight-line method.
Assets that meet the criteria to be classified as held for sale are reclassified from fixed assets and depreciation on such assets is ceased.
l. Property, plant and equipment under finance leases
A lease is classified as a finance lease or operating lease based on the substance not the form of the contract. Property, plant and equipment under finance lease is recognized if the lease
transfers substantially all the risks and rewards incidental to ownership.
Finance leases are recognized as assets and liabilities in the statement of financial positions as the amounts equal to the fair value of the leased property or, if lower, the present value of the
minimum lease payments. Any initial direct costs of the Company and its subsidiaries are added to the amount recognized as an asset.
Minimum lease payments shall be apportioned between the finance charge and the reduction of the outstanding liability. The finance charge shall be allocated to each period during the lease
term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents shall be charged as expenses in the periods in which they are incurred.
Leased assets are depreciated using the same method over the shorter of the lease term and their economic useful life.
Leasing arrangements that do not meet the above criteria are accounted for as operating leases for which payments are charged as an expense on the straight-line basis over the lease period.
m. Assets held for sale
Assets held for sale are measured at the lower of carrying amount and fair value less cost to sell. Gain or loss on the measurement of the lower of carrying amount and fair value less cost to sell is
charged to consolidated statement of comprehensive income.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued n. Deferred charges for land rights
Costs incurred to process and extend land rights are deferred and amortized using the straight-line method over the term of the land rights.
o. Foreign currency translation
The functional currency of the Company and its subsidiaries is the Indonesian Rupiah and the accounting records of the Company and its subsidiaries are maintained in Indonesian Rupiah.
Transactions in foreign currencies are translated into Indonesian Rupiah at the rates of exchange prevailing at transaction date. At the consolidated statement of financial position date, monetary
assets and monetary liabilities balances denominated in foreign currencies are translated into Indonesian Rupiah based on the buy and sell rates quoted by Reuters prevailing at the
consolidated statement of financial position date as follows:
The Company and its subsidiaries December 31, 2010 September 30, 2011
Buy Sell
Buy Sell
United States Dollars “US” 1 9,005
9,015 8,780
8,800 Euro 1
12,011 12,025
11,888 11,919
Yen 1 110.68
110.82 114.23
114.54 The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged
to the consolidated statement of comprehensive income of the current year, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets Note 2k.
p. Revenue and expense recognition
Since January 1, 2011, the Company and its subsidiaries have adopted PSAK 23 Revised 2010, “Revenue” and ISAK 10 “Customer Loyalty Program”, which became effective for financial
statement periods beginning on or after January 1, 2011 and is applied prospectively.
i. Implementation of PPSAK 1 “Withdrawal of PSAK 35 Accounting for Telecommunication
Services” In June 2009, the Indonesian Financial Accounting Standard Board “Dewan Standar
Akuntansi Keuangan” or “DSAK” issued Statement of Withdrawal of Financial Accounting Standard No. 1 PPSAK 1, effective for financial statement periods beginning on or after
January 1, 2010. PPSAK 1, among other things, revokes PSAK 35 “Accounting for Revenue from Telecommunications Services”. The Company and its subsidiaries adopted PPSAK 1
starting January 1, 2010 and applied retrospectively.The effect of such implementation include:
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued p. Revenue and expense recognition continued
i. Implementation of PPSAK 1 “Withdrawal of PSAK 35 Accounting for Telecommunication
Services” continued presentation of the interconnection revenues from a “net” to a “gross” basis;
reclassification of outgoing calls to other operators from interconnection revenues to telephone revenues;
deferral of the installation and connection revenues including incremental costs and recognized as income over the expected term of the customer relationships Notes 2p.ii
and 2p.iii; and recognition of Revenue-Sharing Arrangements “RSA” in a manner similar to capital
leases where the property, plant and equipment and obligation under RSA are reflected on the consolidated statement of financial position as “Property, plant and equipment”
and “RSA liabilities under capital lease”, respectively. All 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.
As a result of the changes, the comparative figures in the consolidated financial statements have been restated as follow:
Before After
restatement Restatement
restatement CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME FOR NINE
MONTHS PERIOD ENDED SEPTEMBER 30, 2010:
Operating Revenues 52,122,352
813,455 51,308,897
Operating Expenses 34,928,218
813,455 34,114,763
Other Expenses 715,298
35,980 679,318
Income Before Tax 16,478,836
35,980 16,514,816
Tax Expense 4,322,212
8,995 4,331,207
Income For The Period 12,156,624
26,985 12,183,609
Basic Earnings Per Share Net income per share
454.17 1.38
455.55 Net income per ADS
40 Series B shares per ADS 18,166.80
55.20 18,222.00
