Group Overview Operation and Financial Review Financials Other Information Sustainability and Governance 91 Annual Report 2025 Notes to the financial statements For the financial year ended 31 December 2025 3. Significant accounting estimates and judgements The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of each reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in the future periods. 3.1 Judgements made in applying accounting policies In the process of applying the Group’s accounting policies, management has made the following judgement which have the most significant effect on the amounts recognised in the consolidated financial statements: Income tax The Group has exposure to income taxes in several jurisdictions. Significant judgement is involved in determining provision for income taxes. Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the amount and timing of future taxable income which requires future adjustments to tax income and expense already recorded. There are certain transactions and computation for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected income tax issues based on estimates of whether additional income taxes will be due. Where the final income tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred income tax in the year in which such decision is made by the taxation authority. The carrying amount of the Group’s income tax payable as at 31 December 2025 is Rp316.6 billion (2024: Rp349.8 billion). The carrying amount of the Group’s deferred tax assets and deferred tax liabilities as at 31 December 2025 is Rp271.2 billion (2024: Rp294.7 billion) and Rp726.1 billion (2024: Rp773.8 billion) respectively. Further details are disclosed in Note 18. Claims for tax refund and tax assessments under appeal The management exercises judgement to record the amount of recoverable and refundable tax claims by the Tax Office based on the interpretations of current tax regulations. Further details are disclosed in Note 17. 3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period are discussed below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. (a) Allowance for ECL of plasma receivables The ECL allowance is based on the credit losses expected to arise over the life of the asset (lifetime ECL), unless there has been no significant increase in credit risk since origination, in which case, the allowance is based on the 12 months’ ECL. The Group primarily determined a receivable from individual plasma project has significant increase in credit risk when the actual development cost per hectare is exceeding the agreed development cost per hectare as stated in the credit agreement between the cooperatives and the creditor. At this point, the Group estimates the impairment loss using lifetime ECLs.
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