NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
i. Financial assets continued
d. Available-for-sale financial assets continued Gains or losses arising from changes in fair value of the trading securities are presented
in the income statement within other expensesincome in the period in which they arise. ii. Financial liabilties
The Company and its subsidiaries classify their financial liabilities as i financial liabilities at fair value through profit or loss or ii financial liabilities measured at amortized cost.
The Company’s financial liabilities include trade payables, other payables, accrued expenses, loans, bonds and notes.
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 acquired 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 June 30, 2012 and December 31, 2011.
b. Financial liabilities measured at amortized cost Financial liabilities that are not classified as at fair value through profit and loss fall into
this category and are measured at amortized cost. Financial liabilities measured at amortized cost are among other things, trade payables, other payables, accrued
expenses, loans, bonds and notes.
iii. Offsetting financial instruments Financial assets and liabilities are offset and the net amount is reported in the statement of
financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability
simultaneously.
v. Treasury Stock Reacquired Company’s stock is accounted for at its reacquisition cost and classified as “Treasury
Stock” and presented as a deduction to equity. The cost of treasury stock sold is accounted for using the weighted average method. The difference resulting from the cost and the proceeds from
the sale of treasury stock is credited to “Additional Paid-in Capital”.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2012 UNAUDITED AND DECEMBER 31, 2011 AUDITED
AND SIX MONTHS PERIOD ENDED JUNE 30, 2012 AND 2011 UNAUDITED Figures in tables are presented in billions of Rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued w. Dividends
Dividend distribution to the Company’s stockholders is recognized as liability in the Company’s consolidated financial statements in the period in which the dividends are approved by the
Company’s stockholders. For interim dividends, the Company recognized them as liability based on the Board of Director’s decision with the approval from the Board of Commissioners.
x. Earnings per share and earnings per ADS
Basic earnings per share are computed by dividing income for the period attributable to owners of the parent by the weighted average number of shares outstanding during the period. Income per
ADS is computed by multiplying basic earnings per share by 40, the number of shares represented by each ADS.
The Company does not have potentially dilutive ordinary shares.
y. Segment information The Company and its subsidiaries segment information is presented based upon identified
operating segments. An operating segment is a component of an entity: a that engages in business activities from which it may earn revenues and incur expenses including revenues and
expenses relating to transactions with other components of the same entity; b whose operating results are regularly reviewed by the Company and its subsidiaries chief operating decision
maker “CODM” ie. Directors, to make decisions about resources to be allocated to the segment and assess its performance, and c for which discrete financial information is available.
z. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The Company and its subsidiaries make estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are addressed below.
i. Retirement benefits
The present value of the retirement benefits obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used
in determining the net cost income for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of retirement benefits obligations.
The Company and its subsidiaries determine the appropriate discount rate at the end of each reporting period. This is the interest rate that should be used to determine the present value
of estimated future cash outflows expected to be required to settle the obligations. In determining the appropriate discount rate, the Company and its subsidiaries consider the
interest rates of government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement
benefit obligation.
