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Financial reporting framework in Indonesia

The standard-setting body in Indonesia is the Indonesian Financial Accounting Standards Board (Dewan Standar Akuntansi Keuangan or DSAK) of the Institute of Indonesia Chartered Accountants (Ikatan Akuntan Indonesia or IAI).


General Financial Accounting Standards (SAK)

Indonesian Financial Accounting Standards (SAK) include Statements of Financial Accounting Standards (PSAK) and Interpretation of Financial Accounting Standards (ISAK) issued by DSAK IAI and the Sharia Standards Board of IAI (DSAS IAI) as well as financial reporting  regulation issued by the capital market regulator for entities under its supervision such as listed companies.

Indonesia's approach to International Financial Reporting Standards (IFRS) adoption was to maintain its national GAAP (Indonesian Financial Accounting Standards) and converged it gradually with IFRSs.  Effective January 1, 2015, Indonesia has generally converged with IFRSs which were effective January 1, 2014.  DSAK IAI has succeeded to shorten the gap between the two standards from three (3) years on January 1, 2012 to one (1) year on January 1, 2015. Indonesia continued the convergence process by considering new standards, recent amendments and IFRS exposure drafts. Currently, most of the IFRSs issued and effective on or after January 1, 2021 have the same SAK equivalents and with the same effective dates as their related IFRSs.  

The IFRSs have been adopted to SAK in all material respects, although some differences remain in certain standards. Notable differences include the following:

  • IFRS 1 First-time Adoption of International Financial Reporting Standards and IFRS 14 Regulatory Deferral Accounts have not been adopted into SAK;
  • PSAK 1 Presentation of Financial Statements defines PSAK to include Sharia accounting standards and reporting regulations issued by the capital market regulator for entities under its supervision;
  • PSAK 65 Consolidated Financial Statements has not adopted paragraph 4(a) of IFRS 10 Consolidated Financial Statements on the consolidation exemption based on certain criteria;
  • PSAK 4 Separate Financial Statements does not allow a parent stand-alone financial statements as stand-alone general-purpose financial statements, such should be presented as supplementary information to the consolidated financial statements; and
  • PSAK 15 Investments in Associates and Joint Ventures does not provide an exemption from applying the equity method of accounting for its associates or joint ventures if the parent is exempt from preparing consolidated financial statements based on the consolidation exemption in IFRS 10 paragraph 4(a), as such exemption is not adopted in PSAK 65.

In addition to IFRS-based SAK, DSAK IAI has also issued PSAK and ISAK which have no IFRS equivalents, such as:

  • PSAK 28 Accounting for Loss Insurance;
  • PSAK 36 Accounting for Life Insurance;
  • PSAK 38 Accounting for Business Combination Under Common Control;
  • PSAK 70 Accounting for Tax Amnesty Assets and Liabilities;
  • ISAK 31 Interpretation of the scope of PSAK 13: Investment Property; and
  • ISAK 36 Interpretation of Interaction between Provisions Regarding Land Rights in PSAK 16 Fixed Assets and PSAK 73 Leases

Entities that carry out sharia transactions, both Islamic institutions and non-Islamic institutions adopt Sharia Accounting Standards (SAS) issued by DSAS IAI.

Recent SAK updates (all links to IAI website):


Accounting Standards for Entities without Public Accountability

Indonesia has a different framework (independent from SAK) for Accounting for Entities Without Significant Public Accountability (SAK ETAP) that may be adopted by entities without significant public accountability.

An entity has significant public accountability if:

  • it has submitted a registration statement, or is in the process of submitting a registration statement, to the capital market authority or other regulators for the purpose of issuing securities in the capital market; or
  • it controls assets in a fiduciary capacity for a large group of people, such as banks, insurance entities, brokers and or securities traders, pension funds, mutual funds and investment banks.

Effective January 1, 2025, Indonesia will adopt IFRSs for SMEs 2015 version to replace SAK ETAP with some differences mainly relating to scope (i.e. only for entities with no significant public accountability) and some transitional provisions.


Correction list for hyphenation

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