• Accounting
• ||
• February 15, 2024

The IFRS convergence program that began in late 2008 has resulted in SAK converging with IFRS since January 1, 2012. Thereafter, at the end of 2022 IAI issued SAK that is a full adoption of IFRS Accounting Standards. The IFRS convergence program resulted in Indonesian SAK and the IFRS adoption program resulted in International SAK. The following are the main differences between International SAK and Indonesian SAK.

A. Standards in International SAK that have no equivalent in Indonesian SAK

1. PSAK i101 Initial Adoption of International Financial Accounting Standards
2. PSAK i114 Regulatory Deferral Accounts
3. ISAK i102 Members’ Shares in Cooperative Entities and Similar Instruments
4. ISAK i105 Rights to Interests in Funds for Post-Operating, Restoration and Environmental Rehabilitation Activities
5. ISAK i106 Liabilities arising from Participation in a Specific Market – Waste Electrical and Electronic Equipment
6. ISAK i207 Introduction of the Euro

PSAK i101 is not relevant for adoption into Indonesian SAK as it is not a full adoption of IFRS Accounting Standards. PSAK i114, ISAK i102, ISAK i105, ISAK i106, and ISAK i207 were not adopted because they are not relevant to the fact pattern in Indonesia.

B. Standards in Indonesian SAK that have no equivalent in International SAK

1. PSAK 104: Insurance Contracts
2. PSAK 328: Accounting for Loss Insurance Contracts
3. PSAK 336: Life Insurance Contract Accounting
4. PSAK 338: Business Combinations of Entities under Common Control
5. PSAK 370: Accounting for Tax Amnesty Assets and Liabilities
6. ISAK 331: Interpretation of the Scope of PSAK 240: Investment Property
7. ISAK 332: Definitions and Hierarchy of Financial Accounting Standards
8. ISAK 335: Presentation of Financial Statements of Not-for-Profit Entities
9. ISAK 336: Interpretation of the Interaction between the Provisions on Land Rights in PSAK 216: Property, Plant and Equipment and PSAK 116: Leases
10. All Sharia PSAKs and ISAKs

PSAK 328 and PSAK 336 complement PSAK 104 (which is convergent with IFRS 4 Insurance Contract). These three PSAKs will be replaced by PSAK 117: Insurance Contracts which will be effective January 1, 2025. PSAK 338 was developed because there is no standard in IFRS Accounting Standards that regulates business combinations between entities under common control. While PSAK 370 and ISAK 331, ISAK 332, ISAK 335 and ISAK 336 are standards related to local accounting issues.

The following are the Sharia PSAK and ISAK:

1. PSAK 401: Presentation of Islamic Financial Statements
2. PSAK 402: Murabahah Accounting
3. PSAK 403: Salam Accounting
4. PSAK 404: Istishna Accounting
5. PSAK 405: Mudharabah Accounting
6. PSAK 406: Musyarakah Accounting
7. PSAK 407: Ijarah Accounting
8. PSAK 408: Accounting for Sharia Insurance Transactions
9. PSAK 409: Accounting for Zakat, Infaq, and Sadaqah
10. PSAK 410: Sukuk Accounting
11. PSAK 411: Wa’d Accounting
12. PSAK 412: Waqf Accounting
13. PSAK 459: Islamic Banking Accounting
14. ISAK 401: Recognition of Murabahah Income without Significant Risk Related to Inventory Ownership
15. ISAK 402: Impairment of Murabahah Receivables

C. Standards already applicable in International SAK but not yet applicable in Indonesian SAK

PSAK i117 Insurance Contracts has become effective January 1, 2023, while PSAK 117: Insurance Contracts will be effective on January 1, 2025.

D. Some Standards in Indonesian SAK with some requirements that are different from International SAKs

Some standards in Indonesian SAK refer to IFRS Accounting Standards with significant adjustments in accordance with conditions in Indonesia.

1. PSAK i110 vs PSAK 110 – Consolidated Financial Statements
   The exemption from preparing consolidated financial statements for parent entities in PSAK i110 paragraph 4(a) is not adopted in PSAK 110 because the exemption for parent entities from preparing consolidated financial statements is optional rather than mandatory, not relevant in the Indonesian context in terms of cost and benefit considerations, and OJK regulations require that all parent entities publish consolidated financial statements as general purpose financial statements of the entity.
2. PSAK i201 vs PSAK 201 – Presentation of Financial Statements
   PSAK i201 paragraphs 19-22 are absent from PSAK 201 in relation to when compliance with a requirement in a PSAK/ISAK would give a false and misleading understanding. PSAK 201 prohibits entities from deviating from compliance with the applicable PSAK/ISAK, and requires entities to disclose the reasons for compliance with misleading application of standards, and adjustments that are deemed misleading.
3. PSAK i210 vs PSAK 210 – Events After the Reporting Period
   PSAK i210 paragraph 17 requires an entity to disclose the fact if the entity’s owners or other parties have the power to change the financial statements after they are issued. PSAK 210 does not provide for such requirements.
4. PSAK i227 vs PSAK 227 – Standalone Financial Statements
   PSAK 227 does not allow a parent entity to present separate stand-alone financial statements as general purpose financial statements and requires the stand-alone financial statements to be presented as supplementary information to the consolidated financial statements.
5. PSAK i228 vs PSAK 228 – Investments in Associates and Joint Ventures
   PSAK 228 does not adopt the exemption from applying the equity method for investments in associates and joint ventures if the parent entity is exempted from preparing consolidated financial statements.
6. PSAK i234 Interim Financial Reporting vs PSAK 234 Interim Financial Reporting
   PSAK 234 does not have requirements that encourage public entities to prepare interim financial statements because they are governed by applicable regulations, and those for the interaction between interim financial statements and interim consolidated financial statements.

All other standards in SAK International and SAK Indonesia are significantly consistent, with the main difference being the effective date.

Please refer to SAK Online for SAK Indonesia.

Source : Ikatan Akuntan Indonesia