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
31
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued
ix. Customer loyalty programme continued Consideration received is allocated between the telecommunication services and the points
issued, with the consideration allocated to the points equal to their fair value. Fair value of the points is determined based on historical information about redemption rate of award points.
Fair value of the points issued is deferred and recognized as revenue when the points are redeemed or expired.
x. Expenses Expenses are recognized as they are incurred, using accruals methods.
s. Employee benefits
i. Short-term employee benefits
All short-term employee benefits which consist of salaries and related benefits, vacation pay, incentives and other short-term benefits are recognized as expense on undiscounted basis
when employees have rendered service to the Group.
ii. Pension and post-retirement health care benefit plans The net obligations in respect of the defined pension benefit and post-retirement health care
benefit plans are calculated at the present value of estimated future benefits that the employees have earned in return for their service in the current and prior periods, less the fair
value of plan assets and as adjusted for unrecognized actuarial gains or losses and unrecognized past service cost. The calculation is performed by an independent actuary using
the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of
government bonds that are denominated in the currencies in which the benefits will be paid and that have terms to maturity approximating the terms of the related retirement benefit
obligation. Government bonds are used as there is no deep market for high quality corporate bonds.
Plan assets are assets that are held by the pension and post-retirement health care benefit plans. These assets are measured at fair value at the end of the reporting period, which is
based on the securities’ quoted market price information. The amount of prepaid pension costs that can be recognized is limited to the total of any unrecognized past service costs,
unrecognized actuarial losses and the present value of economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions, when exceeding the greater of 10 of the present value of defined benefit
obligation or 10 of the fair value of plan assets, are charged or credited to the consolidated statements of comprehensive income over the average remaining service lives of the relevant
employees. Prior service cost is recognized immediately if vested or amortized over the vesting period.
For defined contribution plans, the regular contributions constitute net periodic costs for the period in which they are due and as such are included in staff costs when they become
payable.
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.
