PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 25
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
n. Joint operation schemes continued
MTR are recognized on a monthly basis, based upon the contracted MTR amount for the current year, in accordance with the KSO agreement.
The Companys share of DKSOR is recognized on the basis of the Companys percentage share of the KSO revenues, net of MTR and operational expenses of the KSO Units, as provided in the
KSO agreements.
Under PSAK No. 39, “Accounting for Joint Operation Schemes”, which supersedes paragraph 14 of PSAK No. 35, “Accounting for Telecommunication Services Revenue”, the assets built by the
KSO Investors under the Joint Operation Schemes are recorded in the books of the KSO Investors which operate the assets and are transferred to the Company at the end of the KSO period or upon
termination of the KSO agreement.
o. Deferred charges for landrights
Costs incurred to process and extend the landrights are deferred and amortized using the straight- line method over the term of the landrights.
p. Revenue and expense recognition
i. Fixed line telephone revenues
Revenues from fixed line installations are recognized at the time the installations are placed in service. Revenues from usage charges are recognized as customers incur the charges.
ii. Cellular and fixed wireless telephone revenues
Revenues from service connections connection fees are recognized as income at the time the connections occur. Revenues from airtime for cellular and monthly subscription
charges are recognized as accessed and as earned. Revenues from prepaid card customers, which consist of the sale of starter packs, also known as SIM cards in the case of cellular and
RUIM in the case of fixed wireless telephone, and pulse reload vouchers, are recognized as follows:
1. Sale of starter packs is recognized as revenue upon delivery of the starter packs to
distributors, dealers or directly to customers. 2. Sale of pulse reload vouchers is recognized initially as unearned income and recognized
proportionately as revenue based on successful calls made by the subscribers or whenever the unused stored value of the voucher has expired.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
p. Revenue and expense recognition continued
iii. Interconnection revenues Revenues from network interconnection with other domestic and international
telecommunications carriers are recognized as incurred and are presented net of interconnection expenses.
Expenses are recognized on an accrual basis.
q. Employee benefits
i. Pension and post-retirement health care benefit plans
The Company’s net obligations in respect of the defined pension benefit and post-retirement health care benefit plans are calculated at the present value of estimated future benefits that
the employees have earned in return for their service in the current and prior periods, deducted by any plan assets. The calculation is performed by an independent actuary using
the projected unit credit method.
ii. Long service awards “LSA”
The Company’s employees are entitled to receive certain cash awards based on length of service requirement. The benefits are either paid at the time the employee reaches certain
anniversary dates during employment, upon retirement or at the time of termination.
The Company’s obligation with respect to LSA is calculated by an independent actuary using the projected unit credit method.
iii. Early retirement benefits
Early retirement benefits are accrued at the time the Company makes a commitment to provide early retirement benefits as a result of an offer made in order to encourage voluntary
redundancy. The Company is demonstrably committed to a termination when, and only when, the Company has a detailed formal plan for the early retirement and is without
realistic possibility of withdrawal.
