PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND MARCH 31, 2011 UNAUDITED AND
THREE MONTHS PERIOD ENDED MARCH 31, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
34
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Employee benefits continued
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.
r. 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 losses carried forward, to the extent
their future realization is probable. Deferred tax assets and liabilities are measured using 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 comprehensive 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 at each reporting date.
Amendment to taxation obligations are recorded when an assessment is received or if appealed against, when the results of the appeal are determined.
Deferred tax assets and liabilities are offset in the consolidated statement of financial positions, except if these are for different legal entities, in the same manner the current tax assets and
liabilities are presented.
s. Financial instruments
In 2006, the DSAK issued PSAK 50 Revised 2006 Financial Instruments: Presentation and Disclosures and PSAK 55 Revised 2006 Financial Instruments: Recognition and
Measurement. These standards amend both PSAK 50 Accounting for Investments in Certain Securities and PSAK 55 Accounting for Derivative Instruments and Hedging Activities. Both
standards are applicable for financial statements covering periods beginning on or after January 1, 2010.
The adoption of the standards did not have a material impact on the result of the Company and its subsidiaries. In accordance with the transitional provision of PSAK 55 Revised 2006, the
impact of recalculating the provision for impairment loss of Rp.91,237 million has been adjusted to retained earnings at January 1, 2010.
In implementing PSAK 50 Revised 2006 and PSAK 55 Revised 2006, the Company and its subsidiaries classify financial instruments into financial assets and financial liabilities.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2010 AUDITED AND MARCH 31, 2011 UNAUDITED AND
THREE MONTHS PERIOD ENDED MARCH 31, 2010 AND 2011 UNAUDITED Figures in tables are presented in millions of Rupiah, unless otherwise stated
35
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued s. Financial instruments continued
i. Financial assets
The Company and its subsidiaries classify their financial assets as i financial assets at fair value through profit and loss, ii loans and receivables, iii held-to-maturity financial assets
or iv available-for-sale financial assets. The classification depends on the purpose for which the financials assets were acquired. Management determines the classification of its financial
assets at initial recognition.
a. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets classified as held
for trading. A financial asset 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. Financial assets at fair value through profit or loss consist of trading securities which are recorded as temporary investment.
b. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables consist of, among other things, trade receivables, other receivables, other current financial assets
and other non-current financial assets.
c. Held-to-maturity financial assets Held-to-maturity investments are non-derivative financial assets with fixed or
determinable payments and fixed maturities that management has the positive intention and ability to hold to maturity, other than:
a those that the Company upon initial recognition designates as at fair value through profit or loss;
b those that the Company designates as available for sale; and c those that meet the definition of loans and receivables.
These are initially recognized at fair value including transaction costs and subsequently measured at amortized cost, using the effective interest method.
No financial assets were classified as held-to-maturity financial assets as of March 31, 2010 and 2011.
d. Available-for-sale financial assets Available-for-sale investments are non-derivative financial assets that are intended to be
held for indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or that are not classified as loans and
receivables, held-to maturity investments or financial assets at fair value through profit or loss. Available for sale financial assets consist of available for sale securities which are
recorded as temporary investment.
The Company and its subsidiaries use settlement date accounting for regular purchases and sales of financial assets.
