PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
29
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued q. Foreign currency translations
The functional currency and the recording currency of the Company and subsidiaries are both the Indonesian rupiah, except for the functional currency of Telekomunikasi Indonesia International
Pte. Ltd., Hong Kong, Telekomunikasi Indonesia International Pte., Singapore, and Telekomunikasi Indonesia International S.A., Timor Leste whose accounting records are
maintained in U.S. dollars. Transactions in foreign currencies are translated into Indonesian rupiah at the rates of exchange prevailing at transaction date. At the consolidated statement of financial
position date, monetary assets and liabilities denominated in foreign currencies are translated into Indonesian rupiah based on the buy and sell rates quoted by Reuters prevailing at the
consolidated statement of financial position date,as follows:
September 30, 2014 December 31, 2013
Buy Sell
Buy Sell United States dollar “US” 1
12,180 12,190 12,160 12,180 Euro 1
15,424 15,439 16,744 16,774 Yen 1
111.17 111.27 115.67 115.87 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, including incremental costs, are deferred and
recognized as revenue and costs 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 2014 and 2013 to be 18 years, respectively. Revenues from usage charges are recognized as customers incur the charges. Monthly
subscription charges are recognized as revenues when incurred by subscribers.
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
30
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued r. Revenue and expense recognition continued
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: Sales of SIM and RUIM cards are recognized as revenue upon delivery of the starter
packs to distributors, dealers or directly to customers. Sales 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. iii. Interconnection revenues
The revenues from network interconnection with other domestic and international telecommunications carriers are recognized monthly on the basis of the actual recorded traffic
for the month. Interconnection revenues consist of revenues derived from other operators’ subscriber calls to the Company and subsidiaries’subscribers incoming and calls between
subscribers of other operators through the Company and subsidiaries’ network transit. iv. Data, internet and information technology service revenues
Revenues from data communication and internet are recognized based on service activity and performance which are measured by the duration of internet usage or based on the fixed
amount of charges depending on the arrangements with customers. Revenues from sales, installation and implementation of computer software and hardware,
computer data network installation service and installation are recognized when the goods are delivered to customers or the installation takes place.
Revenue from computer software development service is recognized using the percentage-of- completion method.
v. Revenues from network Revenues from network consist of revenues from leased lines and satellite transponder
leases which are recognized over the period in which the services are rendered.
