Financial instruments continued SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

F-32 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

t. Financial instruments continued

i. Financial assets continued d. Available-for-sale financial assets Available-for-sale investments are non-derivative financial assets that are intended to be held for indefinite periods of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Available-for-sale financial assets consist of bonds and mutual funds which are recorded as part of other current financial assets in the consolidated statements of financial position. Available-for-sale securities are stated at fair value. Unrealized holding gains or losses on available-for- sale securities are excluded from income of the current period and are reported as a separate component in the equity section of the consolidated statements of financial position until realized. Realized gains or losses from the sale of available-for-sale securities are recognized in the consolidated statements of comprehensive income, and are determined on a specific identification basis. A decline in the fair value of any available-for-sale securities below cost that is deemed to be other than temporary is charged to the consolidated statements of comprehensive income. ii. Financial liabilities The Group classifies its financial liabilities as i financial liabilities at fair value through profit or loss or ii financial liabilities measured at amortized cost. The Group’s financial liabilities include trade and other payables, accrued expenses, loans and other borrowings which consist of short-term bank loans, obligations under finance leases, two-step loans, bonds and notes, and long-term bank loans. a. Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss are financial liabilities classified as held for trading. A financial liability is classified as held for trading if it is incurred principally for the purpose of selling or repurchasing it in the near term and for which there is evidence of a recent actual pattern of short-term profit taking. No financial liabilities were categorized as held for trading as of December 31, 2012 and 2013. b. Financial liabilities measured at amortized cost Financial liabilities that are not classified as liabilities at fair value through profit or loss fall into this category and are measured at amortized cost. Financial liabilities measured at amortized cost are trade and other payables, accrued expenses, loans and other borrowings which consist of short-term bank loans, obligations under finance leases, two-step loans, bonds and notes, and long-term bank loans. F-33 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

t. Financial instruments continued