Basis of preparation of financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2011 AND 2010, AND YEARS ENDED DECEMBER 31, 2011 AND 2010 Figures in tables are presented in billions of Rupiah, unless otherwise stated 22

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

continued

k. Intangible assets

continued Intangible assets are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows: Years Licenses 10 Other intangible assets 2-10

l. Property, plant and equipment - direct acquisitions

Property, plant and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses. 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. 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 20-40 Leasehold improvements 3-7 Switching equipment 5-15 Telegraph, telex and data communication equipment 5-15 Transmission installation and equipment 5-25 Satellite, earth station and equipment 3-20 Cable network 5-25 Power supply 3-10 Data processing equipment 3-10 Other telecommunications peripherals 5 Office equipment 2-5 Vehicles Customer Premise Equipment “CPE” 5-8 10 Other equipment 5 Depreciation or amortization method, useful lives and residual value of an asset should be reviewed at least at each financial year-end and adjusted if appropriate. Pursuant to PSAK 16R, starting January 1, 2010, the Company has changed the estimated useful lives of office and installation buildings included in buildings from 20 years to 40 years, Submarine Cable Communication SystemFiber Optic Communication System included in transmission installation and equipment from 20 years to 25 years and antenna and towers included in transmission installation and equipment, and satellite, earth station and equipment from 15 years to 20 years, based on the review of the useful lives of the assets in the telecommunications industry that is similar to the Company and the usage expectation based on technical specification. The effect of the changes was accounted for prospectively and resulted in a reduction in the expense charged to the 2010 consolidated statement of comprehensive income Note 10d.iii.