PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
32
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued s. Employee benefits continued
iii. Long Service Awards “LSA” and Long Service Leave “LSL” Employees of Telkomsel and Patrakom are entitled to receive certain cash awards or certain
numbers of days leave benefits based on length of service requirements. LSA are either paid at the time the employees reach certain anniversary dates during employment, or at the time
of termination. LSL is either a certain number of days leave benefit or cash, subject to approval by management, provided to employees who have met the requisite number of years
of service and with a certain minimum age.
The obligation with respect to LSA and LSL is calculated by an independent actuary using the projected unit credit method.
iv. Pre-retirement benefits Employees of the Company are entitled to a benefit during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years. During the pre- retirement period, the employees still receive benefits provided to active employees, which
include, but are not limited to regular salary, health care, annual leave, bonus and other benefits. Benefits provided to employees who enter pre-retirement period are calculated by an
independent actuary using the projected unit credit method.
v. Other post-retirement benefits Employees are entitled to home leave passage benefits and final housing facility benefits to
their retirement age of 56 years. Those benefits are calculated by an independent actuary using the projected unit credit method.
vi. Share-based payments The Company operates an equity-settled, share-based compensation plan. The fair value of
the employees’ services rendered which compensated with the Company’s shares is recognized as an expense in the consolidated statement of comprehensive income and
credited to additional paid-in capital at the grant date.
Gains or losses on curtailment are recognized when there is a commitment to make a material reduction in the number of employees covered by a plan or when there is an amendment of
defined benefit plan terms such that a material element of future services to be provided by current employees will no longer qualify for benefits, or will qualify only for reduced benefits.
Gains or losses on settlement are recognized when there is a transaction that eliminates all further legal or constructive obligations for part or all of the benefits provided under a defined benefit
plan.
t. Income tax
Current and deferred income taxes are recognized as income or an expense and included in the consolidated statement of comprehensive income, except to the extent that the tax arises from a
transaction or event which is recognized directly in equity, in which case, the tax is recognized directly in equity.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2014 and for the Year Then Ended
Figures in tables are expressedin billions of Rupiah, unless otherwise stated
33
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued t. Income tax continued
Current tax assets and liabilities are measured at the amounts expected to be recovered or paid using the tax rates and tax laws that have been enacted at each reporting date. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. Where appropriate, management establishes provisions
based on the amounts expected to be paid to the tax authorities.
The Group recognizes deferred tax assets and liabilities for temporary differences between the financial and tax bases of assets and liabilities at each reporting date. The Group also recognizes
deferred tax assets resulting from the recognition of future tax benefits, such as the benefit of tax losses carried forward to the extent their future realization is probable. Deferred tax assets and
liabilities are measured using enacted or substantively enacted tax rates and tax laws at each reporting date which are expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled, such as tax rates and tax laws which have been enacted or substantially enacted at each reporting date.
The carrying amount of deferred tax asset is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow the benefit of part or all of that deferred tax asset to be utilized.
Deferred tax assets and liabilities are offset in the consolidated statement of financial position, except if these are for different legal entities, in the same manner the current tax assets and
liabilities are presented.
Amendment to tax obligation is recorded when an assessment letter “Surat Ketetapan Pajak” or “SKP” is received or if appealed against, when the results of the appeal are determined. The
additional taxes and penalty imposed through an SKP are recognized as income or expense in the current year profit or loss, unless objectionappeal is taken. The additional taxes and penalty
imposed through the SKP are deferred as long as they meet the asset recognition criteria.
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 their 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, long-term investments, advances and other
non-current financial assets.
