PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2009 AND 2010
SIX MONTHS PERIOD ENDED JUNE 30, 2009 AND 2010 Figures in tables are presented in millions of Rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued 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 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 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 balance sheets, except if these are for different legal entities, in the same manner the current tax assets and liabilities are
presented.
t. Derivative instruments
Derivative transactions are accounted for in accordance with PSAK 55 revised 2006 “Financial Instrument: Recognition and Measurement” which requires that all derivative instruments be
recognized in the financial statements at fair value. To qualify for hedge accounting, PSAK 55 requires certain criteria to be met, including formal documentation at the inception of the hedge.
With the issue of PPSAK 5 “Abolition of ISAK 06 interpretation of paragraph 12 and 16, PSAK 55 1999 “Foreign Currency Embedded Derivative” then embedded derivative instrument is
measured and recognized based on PSAK 55 revised 2006. The Company and its subsidiaries are currently assessing the impact of the abolition of ISAK 6 on the consolidated financial
statements.
Changes in the fair values of derivative instruments that do not qualify for hedge accounting are recognized in the consolidated statements of income. If a derivative instrument is designated and
qualifies for hedge accounting the assets or liabilities shall be adjusted. The changes in fair values of derivative instruments are recognized in the consolidated statements of income or
consolidated statement of changes in stockholder’s equity depending on the type and effectiveness of hedge transaction.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued JUNE 30, 2009 AND 2010
SIX MONTHS PERIOD ENDED JUNE 30, 2009 AND 2010 Figures in tables are presented in millions of Rupiah, unless otherwise stated
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Treasury Stock
Reacquired Company’s stock is accounted for at its reacquisition cost and classified as “Treasury Stock” and presented as a deduction to stockholders’ 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 “Paid-in Capital”.
v. 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.
w. Earnings per share and earnings per ADS
Basic earnings per share are computed by dividing net income by the weighted average number of shares outstanding during the year. Net income per ADS is computed by multiplying basic
earnings per share by 40, the number of shares represented by each ADS.
x. Segment information
The Company and its subsidiaries segment information is presented based upon identified business segments. A business segment is a distinguishable unit that provides different products
and services and is managed separately. Business segment information is consistent with operating information routinely reported to the Companys chief operating decision maker.
y. Use of estimates
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject
to such estimates and assumptions include the carrying amount of property, plant and equipment and intangible assets, the valuation allowance for receivables and obligations related to employee
benefits. Actual results could differ from those estimates. In determining some estimates, management utilizes the work of 3
rd
party specialists as required. In using specialists to assist with models and calculations, management reviews the underlying assumptions and assesses
the corresponding calculations for reasonableness in the context of the circumstances of the Company.
3. TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS
The consolidated financial statements are stated in Indonesian Rupiah “Rupiah”. The translations of Indonesian Rupiah amounts into U.S. Dollars are included solely for the convenience of the readers
and have been made using the average of the market buy and sell rates of Rp.9,065 to US1 as published by Reuters on June 30, 2010. The convenience translations should not be construed as
representations that the Indonesian Rupiah amounts have been, could have been, or could in the future be, converted into United States Dollars at this or any other rate of exchange.
