Trade payables Borrowings Foreign currency translations

F-25 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

n. Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less or in the normal operating cycle of the business, if this period is longer. If not, they are presented as non- current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method.

o. Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds net of transaction costs and the redemption value is recognized in the consolidated statements of comprehensive income over the period of the borrowings using the effective interest method. Fees paid on obtaining loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facilities to which it relates.

p. Foreign currency translations

The functional currency and the reporting currency of the Group are both the Indonesian rupiah, except for the functional currency of Telekomunikasi Indonesia International Pte. Ltd., Hong Kong and Telekomunikasi Indonesia International Pte. Ltd., Singapore and Telekomunikasi Indonesia International S.A., Timor Leste whose accounting records are maintained in U.S.dollars. Transactions in foreign currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction date. At the consolidated statements of financial position date, monetary assets and liabilities denominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell rates quoted by Reuters prevailing at the consolidated statements of financial position date, as follows: 2012 2013 Buy Sell Buy Sell United States dollar “US” 1 9,630 9,645 12,160 12,180 Euro 1 12,721 12,743 16,744 16,774 Yen 1 111.65 111.84 115.67 115.87 The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statements of comprehensive income, 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 2l. F-26 PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of January 1, 2012 Restated, December 31, 2012 Restated and December 31, 2013 and for the years ended December 31, 2011 Restated, 2012 Restated and 2013 Figures in tables are presented in billions of rupiah, unless otherwise stated 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued

q. Revenue and expense recognition