Business Context and Reporting Period
This Form 6-K, filed on March 10, 2026, by Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom Indonesia), addresses a material restatement of its 2023 and 2024 annual consolidated financial statements. The filing discloses accounting errors regarding property and equipment policies and the results of an internal investigation into legacy revenue recognition issues spanning 2014 to 2021.
Key Financial Metrics and Adjustments
The filing does not provide updated revenue, profit, or cash flow figures for the current period but details specific historical adjustments:
- Property and Equipment: Management concluded that "last mile" assets should be classified as non-network assets with shorter useful lives. Certain drop cables with no future economic benefit must be fully depreciated, and replacement assets for quality enhancements must be derecognized.
- Impact on Profit: Required adjustments are expected to reduce profit before income tax for the years ended December 31, 2024, and 2023. The exact amounts are not finalized.
- Impact on Assets: Adjustments will reduce the balance of property and equipment as of December 31, 2024, and 2023.
- Cash Flow: The accounting errors and adjustments will not impact the Company's cash flows.
- Legacy Revenue Overstatement: Approximately 140 transactions totaling roughly USD $324 million in revenue (2014–2021) lacked economic substance. The filing states this overstatement was not quantitatively material to consolidated financial statements for any prior period presented, as most related receivables were fully provisioned by December 31, 2020.
- Reclassification: As of December 31, 2023, 1,945 billion IDR (approx. $121 million) of gross trade receivables and corresponding allowances were reclassified to other non-current assets. This had zero net impact on the Statement of Financial Position.
Material Changes Versus Prior Period
The primary material change is the withdrawal of reliance on the 2023 and 2024 financial statements and the associated audit reports. Previously, management concluded that internal controls were effective; however, the filing now declares a material weakness in Internal Control over Financial Reporting (ICFR) due to errors in capitalization, classification, useful life estimation, and depreciation of property and equipment.
Guidance, Outlook, Risks, and Contingencies
- Restatement Status: The Company plans to restate the affected financial statements as soon as practicable. The evaluation of errors and required adjustments is ongoing and not finalized.
- Regulatory Investigations: The SEC and DOJ are investigating accounting and disclosure issues. The Company's internal investigation is substantially complete, but government investigations remain ongoing. The Company has also self-reported matters to Indonesian authorities regarding anti-corruption, fraud, and embezzlement.
- Remediation: The Company is implementing a remediation plan, including disciplinary actions, hiring additional accounting and legal personnel, engaging consultants, and creating new roles such as the Chief Integrity Officer.
- Risks: Risks include the potential identification of additional material errors, uncertainty regarding the final impact of adjustments, potential delisting, and legal proceedings. The Company cannot assure that other material errors will not be identified.
Investor Verification Checklist
- Verify the final quantified impact of the restatement on 2023 and 2024 profit before tax and property and equipment balances once the restatement is filed.
- Monitor the status of the ongoing SEC and DOJ investigations and any potential enforcement actions or penalties.
- Review the upcoming Form 20-F for the year ended December 31, 2025, for details on the remediation plan for the material weakness in ICFR.
- Assess the risk of additional legacy transaction errors being identified given the Company's admission of challenges in compiling historical data for transactions dating back nearly 10 years.
- Confirm the timeline for the filing of the restated financial statements to ensure timely disclosure.