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
36
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued u. Financial instruments continued
v. Impairment of financial assets The Group assesses the impairment of financial assets if there is objective evidence that a
loss event has a negative impact on the estimated future cash flows of the financial asset. Impairment is recognized when the loss event can be reliably estimated. Losses expected as
a result of future events, no matter how likely, are not recognized.
Impairment loss on financial assets carried at amortized cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the financial asset’s original effective interest rate. Cash flows relating to short- term receivables are not discounted if the effect of discounting is immaterial.
When a decline in the fair value of an available-for-sale financial asset has been recognized in other comprehensive income and there is objective evidence that the asset is impaired, the
cumulative loss that had been recognized in other comprehensive income is recognized in profit or loss as an impairment loss. The amount of the cumulative loss is the difference
between the acquisition cost net of any principal repayment and amortization and current fair value, less any impairment loss on that financial asset previously recognized.
vi. Derecognition of financial instrument The Group derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire, or when the Group transfers substantially all the risks and rewards of ownership of the financial asset.
The Group derecognizes a financial liability when the obligation specified in the contract is discharged or cancelled or expired.
v. Treasury stock
Reacquired Company shares of stock are accounted for at their reacquisition cost and classified as “Treasury Stock” and presented as a deduction to equity. The cost of treasury stock
soldtransferred is accounted for using the weighted average method. The portion of treasury stock transferred for employees ownership program is accounted for at its fair value at grand date.
The difference between the cost and the proceeds from the saletransfer value of treasury stock is credited to “Additional Paid-in Capital”.
w. Dividends
Dividend for distribution to the stockholders is recognized as a liability in the consolidated financial statements in the year in which the dividend is approved by the stockholders. The interim dividend
as a liability based on the Board of Directors’ decision supported by the approval from the Board of Commissioners.
x. Basic earnings per share and earnings per ADS
Basic earnings pershare is computed by dividing profit for the year attributable to owners of the parent company by the weighted average number of shares outstanding during the year. Income
per ADS is computed by multiplying basic earnings per share by 200, the number of shares represented by each ADS.
The Company does not have potentially dilutive financial investments.
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
37
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued y. Segment information
The Groups segment information is presented based upon identified operating segments. An operating segment is a component of an entity: a that engages in business activities from which it
may earn revenues and incur expenses including revenues and expenses relating to transactions with other components of the same entity; b whose operating results are regularly reviewed by
the Groups chief operating decision maker i.e., the Directors, to make decisions about resources to be allocated to the segment and assess its performance, and c for which discrete financial
information is available.
z. Provision
Provision is recognized when the Group have a present obligation legal or constructive as a result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation, and a reliable estimate can be made of the obligation.
aa. Impairment of non-financial assets
The Group assesses, at the end of each reporting period, whether there is an indication that an asset may be impaired. If such indication exists, the recoverable amount is estimated for the
individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group determines the recoverable amount of the Cash-Generating Unit “CGU” to which the
asset belongs “the asset’s CGU”. The recoverable amount of an asset either individual asset or CGU is the higher of the asset’s
fair value less costs to sell and its value in use. Where the carrying amount of the asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount. In assessing the value in use, the estimated net future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if
available. If no such transactions can be identified, the Group uses an appropriate valuation model to determine the fair value of the asset. These calculations are corroborated by valuation
multiples or other available fair value indicators. Impairment losses of continuing operations are recognized in profit or loss under “Depreciation
and amortization” in the consolidated statement of comprehensive income. An assessment is made at the end of each reporting period as to whether there is any indication
that previously recognized impairment losses for an asset, other than goodwill, may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A
previously recognized impairment loss for an asset, other than goodwill, is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since
the last impairment loss was recognized. The reversal is limited such that the carrying amount of the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would
have been determined, net of depreciation, had no impairment been recognized for the asset in prior periods. Reversal of an impairment loss is recognized in profit or loss.
Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable
amount of each CGU or group of CGUs to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognized. Impairment
loss relating to goodwill cannot be reversed in future periods.
