PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
27
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued s. Employee benefits continued
iii. Share-based payments The Company operates an equity-settled, share-based compensation plan. The fair value of the
employees’ services rendered which are compensated with the Company’s shares is recognized as an expense in the consolidated statements of profit or loss and other
comprehensive income and credited to additional paid-in capital at the grant date.
iv. Early retirement benefits Early retirement benefits are accrued at the time the Company and subsidiaries makes a
commitment to provide early retirement benefits as a result of an offer made in order to encourage voluntary redundancy. A commitment to a termination arises when, and only when
a detailed formal plan for the early retirement cannot be withdrawn.
t. Income tax
Current and deferred income taxes are recognized as income or an expense and included in the consolidated statements of profit or loss and other 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.
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.
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 income 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 statements 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 taxation 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 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.
Indonesian tax regulation set up several type that subject to final tax. Final tax which charged to gross value of transaction remains subject to the transaction even though the subject are losses.
Refer to PSAK No. 46 revised, final tax is not required in scope of PSAK No. 46.
Final income tax on construction services and lease is presented as part of “Other Expenses”.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended
Figures in tables are expressed in billions of Rupiah, unless otherwise stated
28
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued 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 its financial assets as i financial assets at fair value through profit or loss, ii loans and receivables, iii held-to-maturity investment 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 commits 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 and other non-current financial assets. a. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets classified as held for trading. A financial asset is classified as held for trading if it is acquired principally for
the purpose of selling or repurchasing it in the near term and for which there is evidence of a recent actual pattern of short-term profit taking. Gains or losses arising from changes in
fair value of the trading securities are presented as other expensesincome in consolidated statements of profit or loss and other comprehensive income in the period in which they
arise. Financial asset measured at fair value through profit loss consists of derivative asset-
put option which is recognized as part of “Other Current Financial Assets” in the consolidated statements of financial position.
b. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Loans and receivables consist of, among other assets, cash and cash equivalents, other
current financial assets, trade and other receivables, and other non-current assets long- term trade receivables and restricted cash.
These are initially recognized at fair value including transaction costs and subsequently measured at amortized cost, using the effective interest method.
c. Held-to-maturity financial assets Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturities on which management has the positive intention and ability to hold to maturity, other than:
a those that the Group, upon initial recognition, designates as at fair value through profit or loss;
b those that the Group designates as available-for-sale; and c those that meet the definition of loans and receivables.
No financial assets were classified as held-to-maturity investments as of December 31, 2016 and 2015.
