PT TRIKOMSEL OKE Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2009 and 2008 Expressed in Rupiah Unless Otherwise Stated
9
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued c. Foreign Currency Transactions and Balances continued
As of December 31, 2009 and 2008, the exchange rates used are as follows:
2009 2008
1 United States Dollar 9,400
10,950 1 Singapore Dollar
6,699 7,608
1 Hong Kong Dollar 1,212
1,413 1 Thailand Baht
282 315
1 Taiwan Dollar 292
339
d. Derivative Instruments
Every derivative instrument including embedded derivatives is recorded in the consolidated balance sheet as either an asset or liability as measured at fair value of each contract. Changes in
derivative fair value are recognized in current earnings unless specific hedges allow derivative’s gains and losses to offset related results on the hedged item. An entity must formally document,
designate and assess the effectiveness of transactions that meet hedge accounting. The Company’s and Subsidiaries’ derivative instruments are not designated as hedging instruments for
accounting purposes.
e. Time Deposit
Time deposit with maturity of three 3 months or less at time of placement and not pledged as collateral, is presented as “Cash Equivalents”. Time deposit with maturity of more than three 3
months at the time of placement and pledged as collateral or restricted, is presented as part of “Other Non Current Assets - net - Restricted Deposit” in the consolidated balance sheets.
f. Allowance for Doubtful Accounts
The Company and Subsidiaries provide allowance for doubtful accounts based on a review on the probability of non-collection of accounts receivable at the end of the year.
g. Transactions with Related Parties
Transactions with certain parties, which have related party relationship, are recorded and disclosed in accordance with SFAS No. 7, “Related Party Disclosures”.
All significant transactions with related parties are disclosed in the notes to the consolidated financial statements.
h. Inventories
Effective January 1, 2009, the Company and Subsidiaries have applied SFAS No. 14 Revised 2008, “Inventories”, which supersedes SFAS No. 14 1994, “Inventories”. The adoption of this
revised SFAS did not result in a significant effect in the consolidated financial statements.
Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the settlement cost and estimated
cost necessary to make the sale. Cost is determined using weighted-average method.
Allowance for inventory obsolescence is provided based on the review of the physical conditions of the inventories at end of year.
PT TRIKOMSEL OKE Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2009 and 2008 Expressed in Rupiah Unless Otherwise Stated
10
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued i.
Prepaid Expenses
Prepaid expenses are charged to operations over the periods benefited using the straight-line method.
j. Fixed Assets
Direct Ownership Effective January 1, 2008, the Company has applied SFAS No. 16 Revised 2007, “Fixed Assets”,
which supersedes SFAS No. 16 1994, “Fixed Assets and Other Assets”, and SFAS No. 17 1994, “Accounting for Depreciation”, whereby the Company and Subsidiaries have chosen the
cost model for their fixed assets measurement basis.
Fixed assets are stated at cost less accumulated depreciation and impairment losses if any. Such cost includes the cost of replacing part of the fixed assets when that cost is incurred, if the
recognition criteria are met. Likewise, when a major repair is performed, its cost is recognized in the carrying amount of the fixed assets as a replacement if the recognition criteria are satisfied. All
other repairs and maintenance costs that do not meet the recognition criteria are recognized in the consolidated statements of income as incurred.
Depreciation is computed as follows:
Type of Fixed Assets Method
Estimated Useful Lives Years Rate
Building Straight-line
20 5
Office equipment Double-declining
4 and 8 50 and 25
Vehicle Double-declining
8 25
An item of fixed assets is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
calculated as the difference between the net disposal proceeds and the carrying amount of the asset is included in the consolidated statement of income in the year the asset is derecognized.
The asset’s residual values, useful lives and methods of depreciation are reviewed, and adjusted prospectively if appropriate, at each financial year end.
Leases Effective January 1, 2008, SFAS No. 30 Revised 2007, “Leases”. Based on SFAS No. 30
Revised 2007, the determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date and whether the fulfillment of the arrangement
is dependent on the use of a specific asset and the arrangement conveys a right to use the asset. Under this revised SFAS, leases that transfer substantially to the lessee all the risks and rewards
incidental to ownership of the leased item are classified as finance leases. Moreover, leases which do not transfer substantially all the risks and rewards incidental to ownership of the leased item are
classified as operating leases.
