ASSET HELD FOR SALE

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended Figures in tables are expressedin billions of Rupiah, unless otherwise stated 54

11. PROPERTY AND EQUIPMENT continued

a. Gain on disposal or sale of property and equipment 2014 2013 Proceeds from sale of property and equipment 501 466 Net book value 64 36 Gain on disposal or sale of property and equipment 437 430 b. Assets impairment As of December 31 2014 and 2013, the CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. As of December 31 2013, there were indications of impairment in the fixed wireless CGU presented as part of personal segment, which were mainly due to increased competition in the fixed wireless market that resulted in lower average tariffs, declining active customers and declining average revenue per user. The Company assessed the recoverable value of the assets in the CGU and determined that assets for the fixed wireless CGU were impaired by Rp596 billion. The recoverable amount has been determined based on value-in-use VIU calculations. This calculation used the most recent cash flows projection approved by management covering five- year period and with cash flows beyond the five-year period extrapolated using perpetuity growth rate. Management’s cash flow projection also incorporates management’s reasonable expectations for developments in macro economic conditions and market expectations for the Indonesian telecommunications industry. Management applied a pre-tax discount rate of 13.5 derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. In 2014, the Group decided to cease its fixed wireless business no later than December 15, 2015. The Company assessed the recoverable amount to be Rp549 billion as of December 31, 2014 and determined that the assets for fixed wireless CGU were further impaired by Rp805 billion. The recoverable amount has been determined based on VIU calculation using the most recent cash flows projection approved by management. The cash flows projection included cash inflows from the continuing use of the assets during the remaining service period and projected net cash flows to be received for the disposal of the assets for fixed wireless CGU at the end of service period. Projected net cash flows to be received for the disposal of the assets was determined based on cost approach, adjusted for physical, technological and economic obsolescence. Management applied a pre-tax discount rate of 13.5 derived from the Company’s post-tax weighted average cost of capital and benchmarked to externally available data. In addition, management also applied technological and economic obsolescence rate of 30 based on the Company’s internal data, as there is a lack of comparable market data because of the nature of the assets. The calculation of VIU calculation is most sensitive to technological and economic obsolescence rate assumption. An increase in technological and economic obsolescence rate to 40 would result in a further impairment of Rp70 billion. Loss on impairment of assets was recognized within “Depreciation and Amortization” in the consolidated statement of comprehensive income.