PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
26
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Revenue and expense recognition continued
v. Revenues from network Revenues from network consist of revenues from leased lines and satellite transponder
leases. Revenues are recognized based on subscription fees as specified in the agreements. vi. Expenses
Expenses are recognized on accrual basis. Unutilized promotional credits are netted against unearned income.
r. Employee benefits
i. Pension and post-retirement health care benefit plans
The net obligations in respect of the defined pension benefit and post-retirement health care benefit plans are calculated at the present value of estimated future benefits that the
employees have earned in return for their service in the current and prior periods, less fair value of plan assets and as adjusted for unrecognized actuarial gains or losses and
unrecognized past service cost. The calculation is performed by an independent actuary using the projected unit credit method. The present value of the defined benefit obligation is
determined by discounting the estimated future cash outflows using government bond interest rates that have terms to maturity approximating the terms of the related liability.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the greater of 10 of present value defined benefit obligation
or 10 of fair value of plan assets, are charged or credited to the consolidated statements of income over the average remaining service lives of the relevant employees. Prior service cost
is recognized immediately if vested or amortized over the vesting period.
For defined contribution plans, the regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs.
ii. Long Service Awards “LSA” Employees are entitled to receive certain cash awards based on length of service
requirements. The benefits are either paid at the time the employees reach certain anniversary dates during employment, or at the time of termination.
Actuarial gains or losses arising from experience and changes in actuarial assumptions are charged immediately to the consolidated statements of income.
The obligation with respect to LSA is calculated by an independent actuary using the projected unit credit method.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Employee benefits continued
iii. Early retirement benefits Early retirement benefits are accrued at the time the Company makes a commitment to
provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when a detailed formal
plan for the early retirement cannot be withdrawn.
iv. Pre-retirement benefits Employees of the Company are entitled to a benefit during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre- retirement period, the employees still receive benefits provided to active employees, which
include, but are not limited to regular salary, health care, annual leave, bonus and other benefits. Benefits provided to employees which enter pre-retirement period are calculated by
an independent actuary using the projected unit credit method.
v. Other post-retirement benefits Employees are entitled to home leave passage benefits and final housing facility benefits to
their retirement age of 56 years. Those benefits are calculated by an independent actuary using the projected unit credit method.
Gains or losses on curtailment are recognized when there is a commitment to make a material reduction in the number of employees covered by a plan or when there is an amendment of a
defined benefit plan terms such as that a material element of future services to be provided by current employees will no longer qualify for benefits, or will qualify only for reduced benefits.
Gains or losses on settlement are recognized when there is a transaction that eliminates all further legal or constructive obligation for part or all of the benefits provided under a defined
benefit plan.
s. Income tax
The Company and its subsidiaries recognize deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date.
The Company and its subsidiaries also recognize deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax loss carry forwards, to the extent their
future realization is probable. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates and tax laws at each reporting date which are expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Income tax is charged or credited to the consolidated statement of income, except to the extent that it relates to items recognized directly in equity, such as the difference in value arising from
restructuring transactions and other transactions between entities under common control and the effect of foreign currency translation adjustment for certain investments in associated companies,
in which case income tax is also charged or credited directly to equity.
Current tax assets and liabilities are measured at the amount expected to be recovered or paid, using the tax rates and tax laws that have been enacted or substantively enacted at each
reporting date
