PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
w. 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 and disclosure 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, valuation allowance for receivables and obligations related to employee benefits.
Actual results could differ from those estimates.
3. TRANSLATION OF RUPIAH INTO UNITED STATES DOLLARS
The consolidated financial statements are stated in Indonesian Rupiah. The translations of Indonesian Rupiah amounts into United States 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 Rp9,264 to US1 published by Reuters on June 30, 2006. 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.
4. CHANGES IN METHODS OF ACCOUNTING
a. Employee Benefits In June 2004, the Indonesian Financial Accounting Standards Board issued PSAK No. 24 Revised
2004, “Employee Benefits” PSAK 24R, which is a revision of PSAK No. 24, “Accounting for Pension Benefits.” PSAK 24R changes, for the Company, the method of accounting for its
employee benefit plans by requiring the vested portion of prior service cost be immediately recognized and that the cumulative unrecognized actuarial gain or loss exceeding ten percent of the
greater of the present value of the projected benefit obligation and the fair value of plan assets be amortized over the expected average remaining working lives of the employees participating in the
plan. PSAK 24R requires the Company to adopt its provisions retrospectively as of January 1, 2004, the
“Transition Date” by way of the recognition of: i a liability computed in accordance with the provisions of PSAK 24R determined as of the Transition Date the “Transition Liability” and ii
the difference between the Transition Liability and the liability previously recognized for employee benefits as of the same date pursuant to then in effect accounting standards, as a
cumulative effect of a change in method of accounting in stockholders’ equity. Accordingly, the Company has restated its accompanying consolidated balance sheet as of the Transition Date by
increasing its liability for employee benefits previously reported by Rp3,218,724 million with a corresponding decrease in consolidated stockholders’ equity of Rp2,618,665 million, net of tax of
Rp600,059 million. The adoption of PSAK 24R in 2005, has resulted in an increase to previously reported net income for the six months period ended June 30, 2005 in the amount of Rp179,733
million, net of tax of Rp41,988 million.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued JUNE 30, 2005 AND 2006, AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30, 2005 AND 2006 Figures in tables are presented in millions of Rupiah, unless otherwise stated
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4. CHANGES IN METHODS OF ACCOUNTING continued
