PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
53
11. PROPERTY AND EQUIPMENT continued
January 1, Business Reclassifications December 31,
2013 acquisition Divestment Additions Deductions translations
2013 At cost:
Directly acquired assets
Land rights 977
110 -
13 -
2 1,098
Buildings 3,787
120 -
98 1
220 4,224
Leasehold improvements 783
- -
24 27
32 812
Switching equipment 23,750
- 428
2,896 2,577
18,705 Telegraph, telex and data
communication equipment 19
- -
- -
13 6
Transmission installation and equipment
85,289 -
- 1,777
1,311 10,098
95,853 Satellite, earth station and
equipment 7,267
158 110
56 2
87 7,456
Cable network 27,658
- 601
2,084 117
37 28,987
Power supply 10,434
3 253
71 1,136
11,755 Data processing equipment
8,196 -
1 968
62 129
9,230 Other telecommunications
peripherals 280
- -
230 -
10 500
Office equipment 680
5 11
138 1
41 770
Vehicles 71
1 279
1 16
332 Other equipment
111 -
2 -
- 5
104 Property under construction
1,312 -
- 15,349
- 14,690
1,971
Assets under finance lease
Transmission installation and equipment
2,873 -
30 3,170
330 -
5,683 Data processing equipment
339 -
- 5
221 -
123 Office equipment
15 -
- -
8 -
7 Vehicles
- -
- 26
- 26
CPE assets 22
- -
- -
- 22
RSA assets 459
- -
- -
- 459
Total 174,322
396 756
24,898 5,048
5,689 188,123
January 1, Business Reclassifications December 31,
2013 acquisition Divestment Additions Impairment Deductions translations 2013
Accumulated depreciation and impairment losses:
Directly acquired assets
Buildings 1,739
- -
163 -
62 1,840
Leasehold improvements 609
- -
67 -
27 -
649 Switching equipment
17,105 -
- 1,982
- 2,718
3,466 12,903
Telegraph, telex and datacommunication
equipment 16
- -
- -
- 13
3 Transmission installation
and equipment 41,210
- -
7,609 321
1,205 1,269
46,666 Satellite, earth station and
equipment 4,684
- 142
663 226
2 239
5,190 Cable network
17,291 -
181 1,022
49 106
317 17,758
Power supply 5,982
- 1,171
- 67
292 6,794
Data processing equipment 6,355
- 1
738 -
49 221
6,822 Other telecommunications
peripherals 259
- -
18 -
- 10
267 Office equipment
548 -
6 72
- 1
49 564
Vehicles 61
- 1
25 -
1 16
68 Other equipment
102 -
1 4
- -
5 100
Assets under finance lease
Transmission installation and equipment
782 -
3 896
- 330
- 1,345
Data processing equipment 261
- -
37 -
215 -
83 Office equipment
7 -
- 1
- 6
- 2
Vehicles -
- -
1 -
- 1
CPE asets 11
- -
2 -
- -
13 RSA assets
253 -
- 41
- -
- 294
Total 97,275
- 335
14,512 596
4,727 5,959
101,362
Net Book Value 77,047
86,761
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
54
11. PROPERTY AND EQUIPMENT continued
a. Gain on disposal or sale of property and equipment
2014 2013
Proceeds from sale of property and equipment 154
55 Net book value
51 19
Gain on disposal or sale of property and equipment
103 36
b. Assets impairment i As of December 31, 2013, the CGUs that independently generate cash inflows were fixed
wireline, fixed wireless, cellular and others. As of December 31, 2013, there were indications of impairment in the fixed wireless CGU presented as part of personal segment, which were
mainly due to increased competition in the fixed wireless market that resulted in lower average tariffs, declining active customers and declining Average Revenue Per User
“ARPU”. The Company assessed the recoverable value of the assets in the CGU and determined that assets for the fixed wireless CGU were impaired by Rp596 billion as at
December 31, 2013, and additional impairment by Rp190 billion as September 30, 2014 which is recognized in the consolidated statement of comprehensive income under
“Depreciation and amortization”. The recoverable amount has been determined based on value-in-use VIU calculations. These calculations used pre-tax cash flow projections
approved by management covering a five-year period and with cash flows beyond the five- year period extrapolated using a perpetuity growth rate. The cash flow projections reflect
management’s expectations of revenue, Earnings Before Interest, Tax, Depreciation and Amortization “EBITDA” growth and operating cash flows on the basis that the fixed wireless
CGU generates positive net cash flows starting from 2014. Management’s cash flow projection also incorporates management’s reasonable expectations for developments in
macro economic conditions and market expectations for the Indonesian telecommunications industry. As of December 31, 2013, management applied a pre-tax discount rate of 13.5
derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. As of December 31, 2013, the perpetuity growth rate used of 0,
assumes that subscriber numbers and average revenue per user may continue to decrease after five years.
If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required
to assess whether there will be further impairment next year. ii Management believes that there is no indication of impairment in the value of other CGUs as
of December 31, 2013. c. Others
i Interest capitalized to property under construction amounted Rp59 billion and Rp100 billion for nine months period ended September 30, 2014 and for the year ended
December 31, 2013, respectively. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization ranges from 9.75 to 15.81 and from
9.75 to 13.07 for nine months period ended September 30, 2014 and for the year ended December 31, 2013, respectively.
ii No foreign exchange loss was capitalized as part of property under construction for nine months period ended September 30, 2014 and for the year ended December 31, 2013.
