PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2016 and For the Nine-Month Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
vi. Derecognition of financial instrument The Group derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial asset.
The Group derecognizes a financial liability when the obligation specified in the contract is discharged or cancelled or has expired.
v. Treasury stock
Reacquired Company shares of stock are accounted for at their reacquisition cost and classified as “Treasury Stock” and presented as a deduction to equity. The cost of treasury stock soldtransferred
is accounted for using the weighted average method. The portion of treasury stock transferred for employees ownership program is accounted for at its fair value at grand date. The difference
between the cost and the proceeds from the saletransfer value of treasury stock is credited to “Additional Paid-in Capital”.
w. Dividends
Dividend for distribution to the stockholders is recognized as a liability in the consolidated financial statements in the year in which the dividend is approved by the stockholders. The interim dividend
as a liability based on the Board of Directors’ decision supported by the approval from the Board of Commissioners.
x. Basic and diluted earnings per share and earnings per ADS
Basic earnings per share is computed by dividing profit for the year attributable to owners of the parent company by the weighted average number of shares outstanding during the year. Income
per ADS is computed by multiplying the basic earnings per share by 200, the number of shares represented by each ADS.
The Company does not have potentially dilutive financial investments.
y. Segment information
The Groups segment information is presented based upon identified operating segments. An operating segment is a component of an entity: a that engages in business activities from which it
may earn revenues and incur expenses including revenues and expenses relating to transactions with other components of the same entity; b whose operating results are regularly reviewed by the
Groups chief operating decision maker i.e., the Directors, to make decisions about resources to be allocated to the segment and assess its performance, and c for which discrete financial information
is available.
z. Provision
Provisions are recognized when the Group has present obligations legal or constructive arising from past events and it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligations and the amount can be measured reliably. Provisions for onerous contracts are recognized when the contract becomes onerous for the lower
of the cost of fulfilling the contract and any compensation or penalties arising from failure to fulfill the contract.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2016 and For the Nine-Month Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued aa. Impairment of non-financial assets
The Group assesses, at the end of each reporting period, whether there is an indication that an asset may be impaired. If such indication exists, the recoverable amount is estimated for the
individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the Cash-Generating Unit “CGU” to which the asset
belongs “the asset’s CGU”.
The recoverable amount of an asset either individual asset or CGU is the higher of the asset’s fair value less costs to sell and its value in use “VIU”. Where the carrying amount of the asset exceeds
its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing the value in use, the estimated net future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, the Group uses an appropriate valuation model
to determine the fair value of the asset. These calculations are corroborated by valuation multiples or other available fair value indicators.
Impairment losses of continuing operations are recognized in profit or loss as part of “Depreciation and Amortization” in the consolidated statements of profit or loss and other comprehensive income.
An assessment is made at the end of each reporting period as to whether there is any indication that previously recognized impairment losses for an asset, other than goodwill, may no longer exist
or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss for an asset, other than goodwill, is reversed only if there has been a
change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognized. The reversal is limited such that the carrying amount of the asset
does not exceed its recoverable amount, nor exceeds the carrying amount that would have been determined, net of depreciation, had no impairment been recognized for the asset in prior periods.
Reversal of an impairment loss is recognized in profit or loss.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of
each CGU or group of CGUs to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment loss relating to
goodwill cannot be reversed in future periods.
ab. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
The Group make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
