Revenue-Sharing Arrangements RSA SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

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 25

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued p. Foreign currency translation continued

The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to income of the current year, 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 2k. q. Revenue and expense recognition i. Fixed line telephone revenues Revenues from fixed line installations are recognized at the time the installations are placed in service and ready for use. Revenues from usage charges are recognized as customers incur the charges. ii. Cellular and fixed wireless telephone revenues Revenues from postpaid service, which consist of connection fee as well as usage and monthly charges, are recognized as follows: • Connection fees for service connection are recognized as revenues at the time the connection occurs. • 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 card is 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 is recognized initially as unearned income and recognized proportionately as usage revenue based on duration of successful calls made and the value added services by the subscribers or the expiration of the unused stored value of the voucher. iii. Interconnection revenues Revenues from network interconnection with other domestic and international telecommunications carriers are recognized as earned in accordance with agreement and are presented net of interconnection expenses. iv. Data and internet revenues Revenues from installations set-up of internet, data communication and e-Business are recognized upon the completion of installations. Revenues from data communication and internet are recognized based on usage . 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