PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments
The Group classifies financial instruments into financial assets and financial liabilities. Financial assets and liabilities are recognized initially at fair value including transaction costs. These are
subsequently measured either at fair value or amortized cost using the effective interest rate method in accordance with their classification.
i. Financial assets
The Group classifies its financial assets as i financial assets at fair value through profit or 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 financial assets are acquired. Management determines the classification of financial assets at initial recognition.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place regular way trades are
recognized on the trade date, i.e., the date that the Group commit to purchase or sell the assets.
The Group’s financial assets include cash and cash equivalents, other current financial assets, trade receivables and other receivables and other non-current financial assets.
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. Gains or losses arising from changes in fair value of the trading securities are presented as other expensesincome in
consolidated statement of profit or loss and other comprehensive income in the period in which they arise. Financial asset measured at fair value through profit loss consists of
derivative asset-
put option which is recognized as part of “ Other Current Financial A
ssets” in the consolidated statement of financial position.
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, cash and cash equivalents, other
current financial assets, trade and other receivables, and other non-current assets long- term trade receivables and restricted cash.
These are initially recognized at fair value including transaction costs and subsequently measured at amortized cost, using the effective interest method.
c. Held-to-maturity financial assets Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities on which management has the positive intention and ability to hold to maturity, other than:
a those that the Group, upon initial recognition, designates as at fair value through profit or loss;
b those that the Group designates as available-for-sale; and c those that meet the definition of loans and receivables.
No financial assets were classified as held-to-maturity financial assets as of June 30, 2016 and December 31, 2015.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2016 and For the Six Months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
i. Financial assets continued
d. Available-for-sale financial assets Available-for-sale investments are non-derivative financial assets that are intended to be
held for indefinite periods 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
part of “O ther Current Financial A
ssets” in the consolidated statement of
financial position. Available-for-sale securities are stated at fair value. Unrealized holding gain or losses on
available-for-sale securities are excluded from income of the current period and are reported as a separate component in the equity section of the consolidated statement of
financial position until realized. Realized gain or losses from the sale of available-for-sale securities are recognized in the consolidated statement of profit or loss and other
comprehensive income, and are determined on the specific identification basis.
ii. Financial liabilities The Group classifies its financial liabilities as i financial liabilities at fair value through profit or
loss or ii financial liabilities measured at amortized cost. The Group’s financial liabilities include trade and other payables, accrued expenses, loans
and other borrowings, and other liabilities. Loans and other borrowings consist of short-term bank loans, two-step loans, bonds and notes, long-term bank loans and obligations under
finance leases. 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 incurred
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, 2016 and December 31, 2015.
b. Financial liabilities measured at amortized cost Financial liabilities that are not classified as liabilities at fair value through profit or loss fall
into this category and are measured at amortized cost. Financial liabilities measured at amortized cost are trade and other payables, accrued expenses, loans and other
borrowings, and other liabilities. Loans and other borrowings consist of short-term bank loans, two-step loans, bonds and notes, long-term bank loans and obligations under
finance leases.
iii. Offsetting financial instruments Financial assets and liabilities are offset and the net amount is reported in the consolidated
statement of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle them on a net basis, or realize the
assets and settle the liabilities simultaneously. The right of set-off must not be contingent on a future event and must be legally enforceable in all of the following circumstances:
a. the normal course of business; b. the event of default; and
c. the event of insolvency or bankruptcy of the Group and all of the counterparties.
