PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2009 AND 2010
SIX MONTHS PERIOD ENDED JUNE 30, 2009 AND 2010 Figures in tables are presented in millions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued j. Intangible assets continued
In 2006, Telkomsel was granted the right to operate the 3G license Note 14.iii. Telkomsel is required to pay an up-front fee and annual rights of usage “Biaya Hak Penggunaan” or “BHP”
fees for the next ten years Note 49c.i. The up-front fee is recorded as an intangible asset and amortized using the straight-line method over the term of the right to operate the 3G license
10 years. Amortization commenced in 2006 when the assets attributable to the provision of the related services became available for use.
Based on management interpretation of the license conditions and the written confirmation from the DGPT, the license may be returned at any time without any financial obligation to pay the
remaining outstanding annual BHP fees. Accordingly, Telkomsel recognizes the annual BHP fees as an expense when incurred. Management evaluates its plan to continue to use the license on
an annual basis.
k. Property, plant and equipment - direct acquisitions
The cost of the assets include: 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, plant and equipment with a cost that is significant in relation to the total cost of the item shall be
depreciated separately. The residual value and the useful life of an asset should be reviewed at least at each financial year-end.
Property, plant and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses.
Property, plant and equipment, except land, are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows:
Years Buildings
20 Leasehold improvements
3-7 Switching equipment
5-15 Telegraph, telex and data communication equipment
5-15 Transmission installation and equipment
5-20 Satellite, earth station and equipment
3-15 Cable network
5-25 Power supply
3-10 Data processing equipment
3-10 Other telecommunications peripherals
5 Office equipment
2-5 Vehicles
5-8 Other equipment
5 Pursuant to PSAK 16R, starting January 1, 2008, the Company has changed the estimated useful
lives of fiber optic included in cable network assets from 15 years to 25 years. The Company charged the impact of the changes in the estimated useful lives to 2008 consolidated income
statements as it is not considered material.
The Company and its subsidiaries periodically evaluate its property, plant and equipment for impairment, whenever events and circumstances indicate that the carrying amount of the assets
may not be recoverable. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written-down to its estimated recoverable amount, which is
determined based upon the greater of its net selling price or value in use.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2009 AND 2010
SIX MONTHS PERIOD ENDED JUNE 30, 2009 AND 2010 Figures in tables are presented in millions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Property, plant and equipment - direct acquisitions continued
Spare parts and servicing equipment are carried as inventory and recognized in profit or loss as consumed. Major spare parts and stand-by equipment that are expected to be used for more than
12 months are recorded as part of property, plant and equipment.
When assets are retired or otherwise disposed of, their cost and the related accumulated depreciation are eliminated from the consolidated financial statements, and the resulting gains or
losses on the disposal or sale of property, plant and equipment are recognized in the consolidated statement of income.
Certain computer hardware cannot be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If any
computer software is independent from its computer hardware, it is recorded as part of intangible assets.
The cost of maintenance and repairs is charged to the consolidated statement of income as incurred. Significant renewals and betterments are capitalized.
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.
l. Property, plant and equipment under finance leases
Since January 1, 2008, the Company and its subsidiaries have adopted PSAK 30 Revised 2007, “Lease” “PSAK 30R”, which became effective for financial statement periods beginning
on or after January 1, 2008.
Based on PSAK 30R, 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. Statement of Financial Accounting Standards Interpretation Interpretasi Pernyataan Standar
Akuntansi Keuangan or “ISAK” 8, “Determining Whether an Arrangement Contains a Lease and Further Discussion on Transitional Provisions of PSAK 30 Revised 2007”, requires the
Company and its subsidiaries to apply PSAK 30R retrospectively to all lease transactions since the commencing dates of the related agreement or prospectively as if the standard applied since
the beginning of reporting periods. The Company has decided to select the prospective application. The cumulative effect was charged to the 2008 consolidated income statements as
the impact of the standard to the prior year was insignificant.
