PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
36
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued aa. Critical Accounting Estimates and Judgements continued
i. Retirement benefits continued
If there is an improvement in the ratings of such government bonds or a decrease in interest rates as a result of improving economic conditions, there could be a material impact on the
discount rate used in determining the post-employment benefits obligations. Other key assumptions for retirement benefits obligations are based in part on current market
conditions. Additional information is disclosed in Notes 34, 35 and 36.
ii. Estimating useful lives of property and equipment and intangible assets
The Company and subsidiaries estimate the useful lives of their property and equipment and intangible assets based on expected asset utilization, considering strategic business plans,
expected future technological developments and market behavior. The estimates of useful lives of property and equipment are based on the Company and subsidiaries collective
assessment of industry practice, internal technical evaluation and experience with similar assets.
The Company and subsidiaries review estimates of useful lives at least each financial year end and are updated if expectations differ from previous estimates due to physical wear and
tear, technical or commercial obsolescence and legal or other limitations on the use of the assets. The amounts and timing of recorded expenses for any year will be affected by
changes in these factors and circumstances. A change in the estimated useful lives of the property and equipment is the change in accounting estimates and is applied prospectively in
profit or loss in the period of the change and future periods.
Detail of nature and carrying amounts of property and equipment is disclosed in Note 11 and intangible assets in Note 13.
iii. Provision for impairment of receivables
The Company and subsidiaries assess whether there is objective evidence that trade receivables have been impaired at the end of each reporting period. Provision for impairment
of receivables is calculated based on a review of the current status of existing receivables and historical collection experience. Such provisions are adjusted periodically to reflect the
actual and anticipated experience. Detail of nature and carrying amounts of provision for impairment of receivables is disclosed in Note 6.
iv. Income taxes
Significant judgement is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The
Company and subsidiaries recognize liabilities for anticipated tax audit issues based on estimates whether additional taxes will be due. Where the final tax outcome of these matters
is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such
determination is made. Detail of nature and carrying amounts of income tax is disclosed in Note 31.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2013 UNAUDITED AND FOR NINE MONTHS PERIOD ENDED
WITH COMPARATIVE FIGURES AS OF DECEMBER 31, 2012 AUDITED AND FOR NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2012 UNAUDITED
Figures in tables are presented in billions of Rupiah, unless otherwise stated
37
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued aa. Critical Accounting Estimates and Judgements continued
v. Impairment of non-financial assets
The Company and subsidiaries annually assess whether goodwill is impaired. Other non- financial assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset exceeds its recoverable amount. The recoverable amount of an asset or a cash generating unit “CGU” is determined based on
the higher of its fair value less costs to sell and its value in use, calculated on the basis of management’s assumptions and estimates.
In determining value in use, the Company and subsidiaries apply management judgement in establishing forecasts of future operating performance, as well as the selection of growth
rates and discount rates. These judgements are applied based on our understanding of historical information and expectations of future performance. Changing the key assumptions,
including the discount rates or the growth rate assumptions in the cash flow projections, could materially affect the value in use calculations.
For the year ended December 31, 2012 the Company recognized Rp247 billion of impairment loss on property and equipment in pertaining to the fixed wireless services. A 1 increase in
the discount rate used would result in an increase in impairment loss of approximately Rp458 billion. However, the recoverable amount of the fixed wireless CGU is most sensitive to
whether management will be able to implement its plans, including the cost efficiency plan, such that it generates positive cash flows and returns to profitability as projected. If the
performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required to assess
whether there will be further impairment next year Note 11b.
3. PATRAKOM ACQUISITON
On September 25, 2013, the Company entered into Sales Purchase Agreement SPA with PT ELNUSA Tbk for the 40 PT Patra Telekomunikasi Indonesia “Patrakom” ownership with
acquisition cost amounting to Rp45.6 billion. This SPA results in the Company’s ownership in Patrakom increased, from 40 to 80. The acquisition of patrakom has been accounted for using
the purchase method of accounting, where the purchase price was allocated to the fair value of the acquired assets and assumed liabilities.
