PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
50
11. PROPERTY AND EQUIPMENT continued
January 1, Reclassifications December 31,
2012 Additions
Deductions Translations 2012
At cost: Directly acquired assets
Land rights 842
135 -
977 Buildings
3,417 98
272 3,787
Leasehold improvements 650
6 3
130 783
Switching equipment 25,470
91 1,438
373 23,750
Telegraph, telex and data communication equipment
20 -
- 1
19 Transmission installation
and equipment 78,584
746 1,680
7,639 85,289
Satellite, earth station and equipment
7,069 35
- 163
7,267 Cable network
26,392 1,965
244 455
27,658 Power supply
9,339 194
83 984
10,434 Data processing equipment
8,082 323
210 1
8,196 Other telecommunications
peripherals 472
- -
192 280
Office equipment 727
60 47
60 680
Vehicles 84
6 4
15 71
Other equipment 111
1 -
1 111
Property under construction 1,203
11,024 43
10,872 1,312
Assets under finance lease
Transmission installation and equipment
305 2,582
10 4
2,873 Data processing equipment
344 6
11 339
Office equipment 27
- -
12 15
Vehicles 48
- 48
- -
CPE assets 22
- -
- 22
RSA assets 479
- -
20 459
Total 163,687
17,272 3,810
2,827 174,322
January 1, Reclassifications December 31,
2012 Additions Impairment Deductions Translations
2012 Accumulated depreciation and
impairment losses: Directly acquired assets
Buildings 1,671
130 -
62 1,739
Leasehold improvements 502
63 -
3 47
609 Switching equipment
17,412 2,065
- 1,112
1,260 17,105
Telegraph, telex and data communication equipment
17 -
- -
1 16
Transmission installation and equipment
35,169 6,894
153 988
18 41,210
Satellite, earth station and equipment
4,135 517
94 -
62 4,684
Cable network 16,952
1,057 -
238 480
17,291 Power supply
4,916 1,221
- 59
96 5,982
Data processing equipment 6,189
1,001 -
165 670
6,355 Other telecommunications
peripherals 353
5 -
- 99
259 Office equipment
523 61
- 14
22 548
Vehicles 74
6 -
4 15
61 Other equipment
98 5
- -
1 102
Assets under finance lease
Transmission installation and equipment
270 514
- 2
- 782
Data processing equipment 217
51 -
- 7
261 Office equipment
9 4
- -
6 7
Vehicles 47
1 -
48 -
- CPE assets
9 2
- -
- 11
RSA assets 227
36 -
- 10
253 Total
88,790 13,633
247 2,633
2,762 97,275
Net Book Value 74,897
77,047
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2013 and for the Year Then Ended
Figures in tables are expressed in billions of rupiah, unless otherwise stated
51
11. PROPERTY AND EQUIPMENT continued
a. Gain on disposal or sale of property and equipment
2013 2012
Proceeds from sale of property and equipment 466
360 Net book value
53 282
Gain on disposal or sale of property and equipment
413 78
b. Assets impairment i
As of December 31, 2013 and 2012, the CGUs that independently generate cash inflows were fixed wireline, fixed wireless, cellular and others. As of December 31, 2013 and 2012,
there were indications of impairment in the fixed wireless CGU presented as part of personal segment, which were mainly due to increased competition in the fixed wireless market that
resulted in lower average tariffs, declining active customers and declining Average Revenue Per User “ARPU”. The Company assessed the recoverable value of the assets in the CGU
and determined that assets for the fixed wireless CGU were impaired by Rp596 billion and Rp247 billion as at December 31, 2013 and 2012, respectively, which are recognized in the
consolidated statement of comprehensive income under “Depreciation and amortization”. The recoverable amount has been determined based on value-in-use VIU calculations.
These calculations used pre-tax cash flow projections approved by management covering a five-year period and with cash flows beyond the five-year period extrapolated using a
perpetuity growth rate. The cash flow projections reflect management’s expectations of revenue, Earnings Before Interest, Tax, Depreciation and Amortization “EBITDA” growth
and operating cash flows on the basis that the fixed wireless CGU generates positive net cash flows starting from 2014. Management’s cash flow projection also incorporates
management’s reasonable expectations for developments in macro economic conditions and market expectations for the Indonesian telecommunications industry. As of December 31,
2013 and 2012, management applied a pre-tax discount rate of 13.5 and 12.3, respectively, derived from the Company’s post-tax weighted average cost of capital and
benchmarked to externally available data. As of December 31, 2013 and 2012, the perpetuity growth rate used of 0 and 0.5, respectively, assumes that subscriber numbers and
average revenue per user may continue to decrease after five years.
If the performance of the fixed wireless CGU continues to decline or if management’s initiatives are not performing as expected in the next financial year, analysis will be required
to assess whether there will be further impairment next year. ii Management believes that there is no indication of impairment in the value of other CGUs as
of December 31, 2013 and 2012. c. Others
i Interest capitalized to property under construction amounted to Rp100 billion and
Rp44 billion for the years ended December 31, 2013 and 2012, respectively. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization
ranges from 9.75 to 13.07 and from 7.72 to 9.75 for the years ended December 31, 2013 and 2012, respectively.
ii No foreign exchange loss was capitalized as part of property under construction for the years ended December 31, 2013 and 2012.
