NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Foreign currency translation continued
The Company and its subsidiaries June 30, 2012 December 31, 2011
Buy Sell
Buy Sell
United States Dollars “US” 1 9,385
9,400 9,060
9,075 Euro 1
11,802 11,824 11,706
11,727 Yen 1
118.04 118.27 116.69
116.96 The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged
to the consolidated statement of comprehensive income of the current period, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which
are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets Note 2l.
r. Revenue and expense recognition
i. Fixed line telephone revenues
Revenues from fixed line installations are deferred including incremental costs and recognized as income 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 2012 and 2011 is 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:
• Sale of SIM and RUIM cards are recognized as revenue upon delivery of the starter
packs to distributors, dealers or directly to customers. •
Sale 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.
Revenues under Universal Service Obligation “USO“ arrangement are recognized when telecommunication access is ready and the services are rendered.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued
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 derives from other
operator’s subscriber call to the Company and its subsidiary operator’s subscribers incoming and calls between subscribers of other operators through the Company and its
subsidiary’s network transit.
iv. Data, internet and information technology services revenues Revenues from data communication and internet are recognized based on service activity
and performance which is measured by duration of internet usage or based on the fixed amount 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
rendered to customers or the installation take place.
Revenue from computer software development service is recognized using the percentage of completion method.
v. Revenues from network Revenues from network consist of revenues from leased lines and satellite transponder
leases which is recognized over the period in which the services are rendered.
vi. Other telecommunications services 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, plant and
equipment and obligation under RSA are reflected on 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.
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. Expenses Expenses are recognized on an accruals basis.
