Assets held for sale

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2011 AND 2010, AND YEARS ENDED DECEMBER 31, 2011 AND 2010 Figures in tables are presented in billions of Rupiah, unless otherwise stated 25

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

continued

q. Foreign currency translation

continued The Company and its subsidiaries 2011 2010 Buy Sell Buy Sell United States Dollars “US” 1 9,060 9,075 9,005 9,015 Euro 1 11,706 11,727 12,011 12,025 Yen 1 116.69 116.96 110.68 110.82 The resulting foreign exchange gains or losses, realized and unrealized, are credited or charged to the consolidated statement of comprehensive income of the current year, except for foreign exchange differences incurred on borrowings during the construction of qualifying assets which are capitalized to the extent that the borrowings can be attributed to the construction of those qualifying assets Note 2l.

r. Revenue and expense recognition

i. Fixed line telephone revenues Revenues from fixed line installations are deferred including incremental costs and recognized as income over the expected term of the customer relationships. Based on reviews of historical information and customer trends, the Company determined the expected term of the customer relationships in 2011 and 2010 is 10 years, respectively. Revenues from usage charges are recognized as customers incur the charges. Monthly subscription charges are recognized as revenues when incurred by subscribers. ii. Cellular and fixed wireless telephone revenues Revenues from postpaid service, which consist of usage and monthly charges, are recognized as follows: • Airtime and charges for value added services are recognized based on usage by subscribers. • Monthly subscription charges are recognized as revenues when incurred by subscribers. Revenues from prepaid card subscribers, which consist of the sale of starter packs also known as SIM cards in the case of cellular and RUIM in the case of fixed wireless telephone and start-up load vouchers and pulse reload vouchers, are recognized as follows: • Sale of SIM and RUIM cards are recognized as revenue upon delivery of the starter packs to distributors, dealers or directly to customers. • Sale of pulse reload vouchers either bundled in starter packs or sold as separate items are recognized initially as unearned income and recognized proportionately as usage revenue based on duration and total of successful calls made and the value added services used by the subscribers or the expiration of the unused stored value of the voucher. • Unutilized promotional credits are netted against unearned income. Revenues under Universal Service Obligation “USO“ arrangement are recognized when telecommunication access is ready and the services are rendered.