PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued j.
Intangible assets continued
Intangible assets are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows:
Years License
10 Other intangible assets
2-10 In 2006, Telkomsel was granted the right to operate the 3G license Note 13.iii. Telkomsel is
required to pay an up-front fee and annual rights of usage “Biaya Hak Penggunaan” or “BHP” fees for the next ten years Notes 44a.ii and 48c.i. The up-front fee is recorded as an intangible
asset and amortized using the straight-line method over the term of the right to operate the 3G license 10 years. Amortization commenced in 2006 when the assets attributable to the provision
of the related services became available for use.
Based on management interpretation of the license conditions and the written confirmation from the DGPT, the license may be returned at any time without any financial obligation to pay the
remaining outstanding annual BHP fees. Accordingly, Telkomsel recognizes the annual BHP fees as an expense when incurred. Management evaluates its plan to continue to use the license on
an annual basis.
k. Property, plant and equipment - direct acquisitions
The cost of the assets include: a purchase price, b any costs directly attributable to bringing the asset to its location and condition and c the initial estimate of the costs of dismantling and
removing the item and restoring the site on which it is located. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be
depreciated separately. The residual value and the useful life of an asset should be reviewed at least at each financial year-end.
Property, plant and equipment directly acquired are stated at cost, less accumulated depreciation and impairment losses.
Property, plant and equipment, except land, are depreciated using the straight-line method, based on the estimated useful lives of the assets as follows:
Years Buildings
20-40 Leasehold improvements
3-7 Switching equipment
5-15 Telegraph, telex and data communication equipment
5-15 Transmission installation and equipment
5-25 Satellite, earth station and equipment
3-20 Cable network
5-25 Power supply
3-10 Data processing equipment
3-10 Other telecommunications peripherals
5 Office equipment
2-5 Vehicles
5-8 Other equipment
5
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND SEPTEMBER 30, 2011 UNAUDITED AND
NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued k. Property, plant and equipment - direct acquisitions continued
Pursuant to PSAK 16R, starting January 1, 2010, the Company has changed the estimated useful lives of office and installation buildings included in buildings from 20 years to 40 years,
Submarine Cable Communication SystemFiber Optic Communication System included in transmission installation and equipment from 20 years to 25 years and antenna and towers
included in transmission installation and equipment, and satellite, earth station and equipment from 15 years to 20 years, based on the review of the useful lives of the assets in the
telecommunications industry that is similar to the Company and the usage expectation based on technical specification. The effect of the changes was accounted for prospectively and resulted in
a reduction in the expense charged to the 2010 consolidated statement of comprehensive income Note 11d.iii.
Since January 1, 2011, the Company and its subsidiaries have adopted PSAK 48 Revised 2009, “Impairment of Assets” and ISAK 17, “Interim Financial Statements and Impairment of
Assets”, which became effective for financial statement periods beginning on or after January 1, 2011, the Company and its subsidiaries have adopted the PSAK and ISAK and applied it
prospectively. The Company and its subsidiaries periodically evaluate its property, plant and equipment for impairment, whenever events and circumstances indicate that the carrying amount
of the assets may not be recoverable. When the carrying amount of an asset exceeds its estimated recoverable amount, the asset is written-down to its estimated recoverable amount,
which is determined based upon the greater of its net selling price or value in use.
Spare parts and servicing equipment are carried as inventory and recognized in profit or loss as consumed. Major spare parts and stand-by equipment that are expected to be used for more than
12 months are recorded as part of property, plant and equipment.
Since January 1, 2011, the Company and its subsidiaries have adopted PSAK 58 Revised 2009, “Non Current Assets Held for Sale and Discontinued Operations”, which became effective
for financial statement periods beginning on or after January 1, 2011, the Company and its subsidiaries have adopted the PSAK and applied it prospectively. When assets are retired or
otherwise disposed of, their cost and the related accumulated depreciation are eliminated from the consolidated financial statements, and the resulting gains or losses on the disposal or sale of
property, plant and equipment are recognized in the consolidated statement of comprehensive income.
Certain computer hardware can not be used without the availability of certain computer software. In such circumstance, the computer software is recorded as part of the computer hardware. If any
computer software is independent from its computer hardware, it is recorded as part of intangible assets.
The cost of maintenance and repairs is charged to the consolidated statement of comprehensive income as incurred. Significant renewals and betterments are capitalized.
