PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued SEPTEMBER 30, 2005 AND 2006, AND FOR THE NINE MONTHS PERIOD ENDED
SEPTEMBER 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
s. Income tax
The Company and subsidiaries apply the asset and liability method of accounting for income tax. Under this method, deferred tax assets and liabilities are recognized for temporary differences
between the financial and tax bases of assets and liabilities at each reporting date. This method also requires the recognition of future tax benefits, such as the benefit of tax loss carryforwards, to the
extent their realization is probable. Deferred tax assets and liabilities are measured using enacted tax rates at each reporting date which are expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Income tax is charged or credited in the statement of income, except to the extent that it relates to items recognized directly in equity, such as difference in value of restructuring transactions
between entities under common control Note 2d and effect of foreign currency translation adjustment for certain investments in associated companies Note 2g.iii, in which case income tax
is also charged or credited directly to equity.
t. Earnings per share and earnings per American Depositary Share “ADS”
Basic earnings per share is computed by dividing net income by the weighted average number of shares outstanding during the year. Net income per ADS is computed by multiplying basic
earnings per share by 40, the number of shares represented by each ADS. u. Segment information
The Company and its subsidiaries segment information is presented based upon identified business segments. A business segment is a distinguishable unit that provides different products
and services and is managed separately. Business segment information is consistent with operating information routinely reported to the Companys chief operating decision maker.
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements.
v. Derivative instruments
