PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
23
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
k. Property, plant and equipment - direct acquisitions continued Computer software used for data processing is included in the value of the associated hardware.
Property under construction is stated at cost until construction is completed, at which time it is reclassified to the specific property, plant and equipment account to which it relates. During the
construction period, borrowing costs, which include interest expense and foreign currency exchange differences incurred to finance the construction of the asset, are capitalized in
proportion to the average amount of accumulated expenditures during the year. Capitalization of borrowing cost ceases when the construction has been completed and the asset is ready for its
intended use. Equipment temporarily unused are reclassified into equipment not used in operation and
depreciated over their estimated useful life using straight-line method.
l. Property, plant and equipment under capital leases Property, plant and equipment acquired under capital leases are stated at the present value of
minimum lease payments and the residual values option price paid by the Company and its subsidiaries at the end of lease period. At inception of the lease, a corresponding liability, which
equals to the present value of minimum lease payments, is also recorded and subsequently reduced by the principal component of each minimum lease payment. The interest component of
each minimum lease payment is recognized in the consolidated statement of income. Since January 1, 2008, the Company and its subsidiaries has applied PSAK 30 Revised 2007,
“Lease” prospectively. Based on PSAK 30 Revised 2007, property, plant and equipment under capital lease is recognized if the lease transfers substantially all the risks and rewards incidental
to ownership. A lease is classified into capital lease or operating lease based on the substance not the form of the contract.
Leased assets are depreciated using the same method over the shorter of the lease term and its economic useful life.
m. Revenue-Sharing Arrangements RSA
Revenues from RSA are recognized based on Company’s share as agreed upon in the contracts. The Company records assets under RSA as “Property, plant and equipment under RSA” with a
corresponding initial credit to “Unearned income on RSA” presented in the liabilities section of the consolidated balance sheet based on the costs incurred by the investors as agreed upon in the
contracts entered into between the Company and the investors. Property, plant and equipment are depreciated over their estimated useful lives using the straight-line method Note 2k.
Unearned income related to the acquisition of the property, plant and equipment under RSA is amortized over the revenue-sharing period using the straight-line method.
At the end of the revenue-sharing period, the property, plant and equipment under RSA is reclassified to the “Property, plant and equipment” account.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008,
AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated
24
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
n. KSO Revenues from KSO include amortization of unearned initial investor payments, Minimum Telkom
Revenues “MTR” and the Companys share of Distributable KSO Revenues “DKSOR”. Unearned initial investor payments received are recorded net of all direct costs incurred in
connection with the KSO agreement and amortized using the straight-line method over the KSO period of 15 years starting from January 1, 1996.
MTR are recognized on a monthly basis, based on the contracted MTR amount for the current year.
The Companys share of DKSOR is recognized on the basis of the Companys percentage share of the KSO revenues, net of MTR and operational expenses of the KSO Units, as provided in the
KSO agreements. Under PSAK 39, “Accounting for Joint Operation Schemes”, which supercedes paragraph 14 of
PSAK 35, “Accounting for Telecommunications Services Revenue”, the assets built by the KSO partners under the KSO were recorded in the books of the KSO partners which operate the
assets and would be transferred to the Company at the end of the KSO period or upon termination of the KSO agreement.
As of December 31, 2006, the Company has obtained full control over all of the KSO operations through acquisition of interest of KSO partners and the Company has accelerated the
amortization of KSO deferred compensation income per September 30, 2008.
o. Deferred charges for land rights Costs incurred to process and extend land rights are deferred and amortized using the straight-
line method over the term of the land rights. p. Foreign currency translation
The functional currency of the Company and its subsidiaries is the Indonesian Rupiah and the books of accounts of the Company and its subsidiaries are maintained in Indonesian Rupiah.
Transactions in foreign currencies are translated into Indonesian Rupiah at the rates of exchange prevailing at transaction date. At the consolidated balance sheet date, monetary assets and
monetary liabilities balances denominated in foreign currencies are translated into Indonesian Rupiah based on the buy and sell rates quoted by Reuters prevailing at the consolidated balance
sheet date as follows:
The Company and its subsidiaries 2007
2008 Buy
Sell Buy
Sell United States Dollars “US” 1
9,145 9,150
9,425 9,435
Euro1 12,966
12,975 13,546 13,561
Yen1 79.20
79.26 89.91
90.02
