PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition
i. Fixed line telephone revenues
Revenues from fixed line installations, including incremental costs, are deferred and recognized as revenue and costs over the expected term of the customer relationships. Based
on reviews of historical information and customer trends, the Company determined the expected term of the customer relationships in 2013 and 2012 to be 18 years and 10 years,
respectively. Revenues from usage charges are recognized as customers incur the charges. Monthly subscription charges are recognized as revenues when incurred by subscribers.
ii. Cellular and fixed wireless telephone revenues Revenues from postpaid service, which consist of usage and monthly charges, are recognized
as follows: •
Airtime and charges for value added services are recognized based on usage by subscribers.
• Monthly subscription charges are recognized as revenues when incurred by subscribers.
Revenues from prepaid card subscribers, 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 start-up load vouchers and pulse reload vouchers, are recognized as follows: •
Sales of SIM and RUIM cards are recognized as revenue upon delivery of the starter packs to distributors, dealers or directly to customers.
• Sales of pulse reload vouchers either bundled in starter packs or sold as separate items
are recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added
services used by the subscribers or the expiration of the unused stored value of the voucher.
• Unutilized promotional credits are netted against unearned income.
iii. Interconnection revenues The revenues from network interconnection with other domestic and international
telecommunications carriers are recognized monthly on the basis of the actual recorded traffic for the month. Interconnection revenues consist of revenues derived from other operators’
subscriber calls to the Company and subsidiaries’ subscribers incoming and calls between subscribers of other operators through the Company and subsidiaries’ network transit.
iv. Data, internet and information technology service revenues Revenues from data communication and internet are recognized based on service activity and
performance which are measured by the duration of internet usage or based on the fixed amount of charges depending on the arrangements with customers.
Revenues from sales, installation and implementation of computer software and hardware, computer data network installation service and installation are recognized when the goods are
delivered to customers or the installation takes place.
Revenue from computer software development service is recognized using the percentage-of- completion method.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued
v. Revenues from network Revenues from network consist of revenues from leased lines and satellite transponder
leases which are recognized over the period in which the services are rendered. vi. Other telecommunications service revenues
Revenues from other telecommunications services consist of Revenue-Sharing Arrangements “RSA” and sales of other telecommunication services or goods.
The RSA are recorded in a manner similar to capital leases where the property and equipment and obligation under RSA are reflected in the consolidated statement of financial
position. All revenues generated from the RSA are recorded as a component of revenues, while a portion of the investors’ share of the revenues from the RSA is recorded as finance
costs with the balance treated as a reduction of the obligation under RSA.
Universal Service Obligation “USO” compensation from construction activities to design, build and finance assets for the grantor is recognized on the stage of completion basis.
Revenues from operating and maintenance activities in respect of the assets under the concession are recognized when the services are rendered.
In concession contract under USO, the Company and subsidiaries have contractual rights to receive considerations from the grantor. The Company and subsidiaries recognize a financial
asset in their consolidated statement of financial position, in consideration for the services they provide designing, building, operation or maintenance of assets under concession.
Such financial assets are recognized in the consolidated statement of financial position as Accounts Receivable, for the amount of fair value of the infrastructure on initial recognition
and subsequently at amortized cost. The receivable is settled by means of the grantor’s payments received. The financial income calculated on the basis of the effective interest rate
is recognized as finance income.
Revenues from sales of other telecommunication services or goods are recognized upon completion of services and or delivery of goods to customers.
vii. Multiple-element arrangements Where two or more revenue-generating activities or deliverables are sold under a single
arrangement, each deliverable that is considered to be a separate unit of accounting is accounted for separately. The total revenue is allocated to each separately identifiable
component based on the relative fair value of each component and the appropriate revenue recognition criteria are applied to each component as described above.
viii. Agency relationship Revenues from an agency relationship are recorded based on the gross amount billed to the
customers when the Company and subsidiaries act as principal in the sale of goods and services. Revenues are recorded based on the net amount retained the amount paid by the
customer less amount paid to the suppliers because in substance, the Company and subsidiaries act as agents and earned commission from the suppliers of the goods and
services sold.
