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IFRS Compared To Indonesian GAAP An Overview
IFRS Compared To Indonesian GAAP An Overview
INDONESIA
Content
The purpose of this publication is to assist you in understanding the significant
differences between International Financial Reporting Standards (IFRSs)
and Indonesian Generally Accepted Accounting Principles (INA GAAP). This
publication does not discuss every possible difference; rather, it is a summary of
those differences that we have encountered most frequently in practice, resulting
from either a difference in emphasis or specific application guidance. The focus
of this publication is on recognition, measurement and presentation, rather than
on disclosure; therefore disclosure differences generally are not discussed.
However, areas that are disclosure-based, such as segment reporting, are
included.
This publication provides a summary comparison between INA GAAP and IFRSs,
highlighting similarities and differences. At the end of each chapter is a brief
summary of the forthcoming key provisions of IFRSs. The summary provides
a quick overview for easy reference, but is not detailed enough to allow a full
understanding of the significant differences.
While we have highlighted what we regard as significant differences, we
recognize that the significance of any difference will vary by entity. Some
differences that appear major may not be relevant to your business; on the other
hand, a seemingly minor difference may cause you significant additional work.
One way to obtain an appreciation of the differences that are likely to impact
your business is to browse through the highlighted summary at the start of each
chapter.
This publication does not include the specific views that KPMG has developed
in the absence of specific guidance under IFRSs or INA GAAP, since others may
have applied their judgement in developing different guidance. In some cases we
note what we would expect in practice, but in other cases we note simply that
practice varies or may vary.
The requirements of IFRSs are discussed on the basis that the entity has adopted
IFRS already. The special transitional requirements that apply in the period in
which an entity changes its GAAP to IFRSs are not discussed. In such cases
the entity should refer to IFRS 1 First-time Adoption of International Financial
Reporting Standards.
Content
1
1.1
1.2
Background
Introduction
The Framework
1
1
2
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
General issues
Form and elements of financial statements
Statement of changes in equity
Statement of cash flows
Basis of accounting
Consolidation
Business combinations
Foreign exchange translation
Changes in accounting policies and estimates, and errors
Events after the balance sheet date
3
3
6
7
8
9
12
14
15
16
3
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
17
17
18
20
22
23
25
27
28
29
30
31
32
33
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
34
34
35
36
37
39
41
42
43
5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
Special topics
Leases
Segment reporting
Earnings per share
Non-current assets held for sale and discontinued operations
Related party disclosures
Financial instruments: presentation and disclosure
Non-monetary transactions
Accompanying financial and other information
Interim financial reporting
Insurance contracts
Extractive activities
44
44
47
48
50
52
54
55
56
57
58
60
International standards issued through 1 July 2008 that were in effect as of the date of
the comparisons in this publication
PSAKs issued through 1 July 2008 that were in effect as of the date of the comparisons in
this publication
PSAKs issued or revised through 1 July 2008 that become effective subsequent to
the date of comparisons in this publication
62
62
65
68
68
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1 Background
1.1
Introduction
INA GAAP
IFRSs
1.2
The Framework
(Framework, PSAK 25)
2 General issues
2.1
(PSAK 1, PSAK 4)
Notes:
The revised version of IAS 1 was published by the IASB in September 2007 and is
effective for annual reporting periods beginning on or after 1 January 2009. Below
is the summary of key forthcoming requirements under these revised standards:
The revised standard introduces the term comprehensive income to describe all non-owner changes in equity; this term replaces the phrase recognized income and expense. An entity must present either a single statement
of comprehensive income (effectively combining both the income statement
and all non-owner changes in equity in a single statement), or an income
statement and a separate statement of comprehensive income.
The option in the currently effective IAS 1 for presenting the amounts of
transactions with owners in their capacity as owners and the reconciliation
of the opening and closing balance of each component of equity in the notes
to the financial statements has been removed under the revised standard.
These disclosures should be presented in the statement of changes in equity.
In addition, an entity is not permitted to present components of comprehensive income in the statement of changes in equity.
The revised version of IAS 1 requires the amount of income tax relating to
each component of comprehensive income to be disclosed, either in the
statement of comprehensive income or in the notes to the financial statements.
The revised version of IAS 1 has eliminated the option to present information
of dividends and related per-shares amounts on the face of the income statement. Under this revised standards, such information has to be disclosed on
the face of the statement of changes in equity or in the notes.
When an entity restates comparative information following a change in accounting policy, the correction of an error, or the reclassification of items in
the financial statements, the revised version of IAS 1 requires an additional
statement of financial position to be presented as at the beginning of the
comparative period. In such cases three statements of financial position will
be presented.
Under the revised version of IAS 1, the effect of a change in accounting policy
or the correction of an error should be presented separately in the statement
of changes in equity.
The revised version of IAS 1 introduces the term end of the reporting period,
rather than using the terms balance sheet date or reporting date.
2.2
(IAS 1, IAS 8)
Notes:
Please also refer to the summary of key forthcoming requirements under the
revised IAS 1 in section 2.1 Form and elements of financial statements.
2.3
(IAS 7)
2.4
Basis of accounting
(PSAK 1, PSAK 52)
There is no specific guidance on financial reporting in
hyperinflationary economies. In practice, comparative
financial statements presented in functional currency
that is the currency of a hyperinflationary economy
are generally not restated.
2.5
Consolidation
(PSAK 4, BAPEPAM Regulation
No. VIII.G.7)
Notes:
Amended IAS 27 was published by the IASB in January 2008 and is effective for
annual reporting periods beginning on or after 1 July 2009. The following are some
amendments in the revised standards:
10
11
2.6
Business combinations
(PSAK 22, PSAK 38)
Most transactions within the scope of PSAK 22 are
accounted for as acquisitions. However, the uniting of
interests method shall still be applied in certain rare
circumstances.
Notes:
In January 2008 the IASB published the revised version of IFRS 3 Business
Combinations, which supersedes the current version of IFRS 3, together with
amendments to IAS 27 Consolidated and Separate Financial Statements. This
revised version of standard is effective for annual reporting periods beginning
on or after 1 July 2009. The following are some amendments in the revised
standards:
13
2.7
14
2.8
(IAS 1, IAS 8)
15
2.9
16
General
(PSAK 1)
17
3.2
18
(PSAK 16)
Notes:
On 29 May 2007, PSAK 16 (2007 revision) was issued, which is effective for annual reporting periods beginning on or after 1 January 2008. With the issuance of
this revised standard, the differences noted above were eliminated, except for the
difference relating to option to capitalize borrowing cost, which were in turn was
eliminated in March 2007 when A revised IAS 23 was published by the IASB.
The revised IAS 23 is effective for annual periods beginning on or after 1 January
2009. It requires an entity to capitalize borrowing costs directly attributable to
acquisition, construction or production of a qualifying asset as part of the cost of
that asset. Also, it does not permit the option of immediately recognizing all borrowing costs as an expense, which was the benchmark treatment in the previous
version of the standard.
19
3.3
20
21
3.4
Investment property
(PSAK 13)
(IAS 40)
Investment property is generally recorded as longterm investment, unless acquired with the intent to
disposal within 1 year.
Investment property accounting is required for all
investment property.
Notes:
On 29 May 2007, PSAK 13 (revision 2007) was issued, which is effective for annual
reporting periods beginning on or after 1 January 2008. With the issuance of this
revised standard, the differences noted above were eliminated.
22
3.5
23
24
No gains or losses are recognized when nonmonetary assets are contributed to a joint venture
in exchange for an interest in assets contributed by
other joint venture investors when the exchange lacks
commercial substance.
3.6
Financial instruments
(PSAK 50, PSAK 55)
25
For individual securities classified as either available-forsale or held-to-maturity, an enterprise shall determine
whether a decline in fair value below the amortized
cost basis is other than temporary. If the decline in fair
value is judged to be other than temporary, the cost
basis of the individual security shall be written down
to fair value as a new cost basis and the amount of the
write-down shall be included in earnings. The new cost
basis shall not be changed for subsequent recoveries
in fair value. Subsequent increases in the fair value of
available-for-sale securities shall be included in other
comprehensive income; subsequent decreases in fair
value, if not an other-than-temporary impairment, also
shall be included in other comprehensive income.
Notes:
On 16 December 2006, PSAK 50 (revision 2006) and PSAK 55 (revision 2006)
were issued, which are effective for the annual reporting periods beginning on
or after 1 January 2009, early adoption is permitted. With the issuance of these
revised standards, the differences noted above were eliminated.
26
3.7
Inventories
(PSAK 14)
(IAS 2)
27
3.8
Biological assets
(PSAK 32)
There is no specific guidance under INA GAAP on the
accounting for biological assets, except that there is
a separate statement of standards on the accounting
for forestry business.
In practice, the accounting for biological assets
generally follows the historical cost concept.
28
(IAS 41)
Biological assets are measured at fair value unless it
is not possible to measure fair value reliably, in which
case they are measured at cost.
All gains and losses from changes in fair value are
recognized in profit or loss.
3.9
Impairment
(PSAK 19, PSAK 22, PSAK 48)
Generally similar to INA GAAP; however, available-foruse intangible assets should have an indefinite useful
life so to require annual impairment testing.
29
3.10 Equity
(PSAK 4, PSAK 21, PSAK 41,
PSAK 53, BAPEPAM Regulation
No. VIII.G.7)
30
3.11 Provisions
(PSAK 8, PSAK 16, PSAK 37)
31
32
33
General
(PSAK 1, BAPEPAM Regulation
No. VIII.G.7)
34
(IAS 1, IAS 8)
4.2
Revenue
(Framework, PSAK 1, PSAK 23,
PSAK 34)
Notes:
IFRIC 13 Customer Loyalty Programmes was published by the IASB in June
2007 and is effective for annual reporting periods beginning on or after 1 July
2008. This interpretation requires an entity to recognize award credits as a separately identifiable component of revenue and to defer consequently the recognition of revenue for any award credits. The interpretation also requires the consideration received or receivable from customer to be allocated by reference to fair
values but does not prescribe a certain allocation method, i.e., relative fair value.
35
4.3
Government grants
(PSAK 16)
No specific guidance is available for government
grants; however, grants that relate to the acquisition
of a fixed asset shall be recognized at estimated fair
value by directly crediting shareholders equity.
36
4.4
Employee benefits
(PSAK 24)
(IAS 19)
If insufficient information is available for a multiemployer defined benefit plan to be accounted for as
a defined benefit plan, then it is treated as defined
contribution plan and additional disclosures are
required.
37
(PSAK 24)
38
(IAS 19)
4.5
Share-based payments
(Framework, PSAK 53)
(IFRS 2, IFRIC 8)
remeasured
for
Notes:
IFRS 2 was revised by the IASB in January 2008 and is effective for annual
reporting periods beginning on or after 1 January 2009. The following are the key
amendments in the revised standards:
39
40
When either the entity or the counterparty can choose whether to meet a
non-vesting condition and one chooses not to do so during the vesting period,
the amendment requires that the failure to meet the condition to be treated
as a cancellation, i.e., the standard precludes treating the failure to meet
the non-vesting condition as a forfeiture. Under cancellation accounting, the
amount of the compensation cost that otherwise would be recognized over
the remainder of the vesting period is recognized immediately (accelerated
vesting), normally in profit or loss.
When neither the entity nor the counterparty can choose whether to meet
a non-vesting condition, there is no change to the accounting if the nonvesting condition is not satisfied and the entity continues to recognize the
compensation cost over the remaining vesting period.
4.6
Notes:
IAS 23 was revised by the IASB in March 2007 and is effective for annual
reporting periods beginning on or after 1 January 2009. The revised standard
requires an entity to capitalize borrowing costs directly attributable to acquisition,
construction or production of a qualifying asset as part of the cost of that asset,
which is similar to INA GAAP. Also, it does not permit the option of immediately
recognizing all borrowing costs as an expense, which was the benchmark
treatment in the previous version of the standard.
41
4.7
42
(IAS 12)
4.8
(IAS 1)
43
5 Special topics
5.1
Leases
(PSAK 13, PSAK 30, PSAK 47)
44
45
Notes:
On 27 June 2007, PSAK 30 (revision 2007) was issued, which is effective for
annual reporting periods beginning on or after 1 January 2008. With the issuance
of this revised standard, the differences noted above were eliminated.
46
5.2
Segment reporting
(PSAK 5, BAPEPAM Regulation
No. VIII.G.7)
(IAS 14)
Notes:
On 30 November 2006, the IASB published a new standard IFRS 8 Operating
Segments, which supersedes IAS 14 Segment Reporting and is effective for
annual reporting periods beginning on or after 1 January 2009. IFRS 8 requires
segment disclosure based on the components of the entity that management
monitors in making decisions about operating matters (the management
approach). Such components (operating segments) are identified on the basis of
internal reports that the entitys chief operating decision maker reviews regularly
in allocating resources to segments and in assessing their performance.
47
5.3
48
(IAS 33)
(IAS 33)
49
5.4
50
51
5.5
52
(IAS 24)
(IAS 24)
53
5.6
non-detachable
Notes:
On 16 December 2006, PSAK 50 (revision 2006) and PSAK 55 (revision 2006)
were issued, which are effective for the annual reporting periods beginning on
or after 1 January 2009, early adoption is permitted. With the issuance of these
revised standards, the differences noted above were eliminated, except for the
difference on the extent of disclosure of financial instruments as prescribed in
IFRS 7, Financial Instruments: Disclosure (2005).
54
5.7
Non-monetary transactions
(PSAK 16, PSAK 19, PSAK 23)
55
5.8
56
(IAS 1)
5.9
(IAS 34)
Notes:
IAS 1 was revised by the IASB in September 2007 and is effective for annual
reporting periods beginning on or after 1 January 2009. In accordance with this
standard, condensed interim financial statements must include at least:
57
58
(IFRS 4)
(IFRS 4)
59
(IFRS 6)
IFRS 6, Exploration for and Evaluation of Mineral
Resources, is the only IFRS that specifically addresses
the accounting for activities relating to exploration for
and evaluation of mineral resources.
60
(IFRS 6)
61
62
A.1
IAS 1
IAS 2
IAS 7
IAS 8
IAS 10
IAS 11
IAS 12
IAS 14
IAS 16
IAS 17
IAS 18
IAS 19
IAS 19
Amendment Actuarial Gains and Losses, Group Plans and Disclosures (2004)
IAS 20
Accounting for Government Grants and Disclosure of Government Assistance (revised 2003)
IAS 21
IAS 23
IAS 24
IAS 26
IAS 27
IAS 28
IAS 29
IAS 30
Disclosures in the Financial Statements of Banks and Similar Financial Institutions (revised
2003)
IAS 31
IAS 32
IAS 33
IAS 34
IAS 36
IAS 37
IAS 38
IAS 39
IAS 39
Amendment Transitional and Initial Recognition of Financial Assets and Financial Liabilities
(2004)
IAS 40
IAS 41
IFRS 1
IFRS 2
IFRS 3
IFRS 4
IFRS 5
IFRS 6
IFRS 7
SIC7
SIC10
SIC12
IFRIC
SIC13
SIC15
SIC21
SIC25
Income Taxes Change in the Tax Status of an Enterprise of its Shareholders (revised 2004)
SIC27
Evaluating the Substance of Transactions Involving the Legal Form of a Lease (revised 2003)
SIC29
SIC31
SIC32
IFRIC 1
IFRIC 2
IFRIC 4
IFRIC 5
IFRIC 6
Liabilities arising from Participating in a Specific Market Waste Electrical and Electronic
Equipment (2005)
IFRIC 7
63
Economies (2005)
IFRIC 8
IFRIC 9
IFRIC 10
IFRIC 11
IFRIC 12
IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interactions (2007)
64
A.2
PSAKs issued through 1 July 2008 that were in effect as of the
date of the comparisons in this publication
PSAK 1
PSAK 2
PSAK 3
PSAK 4
PSAK 5
PSAK 6
PSAK 7
PSAK 8
Events after the Balance Sheet Date (revised 2003) (IAS 101999)
PSAK 10
PSAK 11
PSAK 12 Financial Reporting of Interests in Jointly Controlled Operations and Assets (1994)
(IAS 311990)
PSAK 13 Investment Property (revised 2006) (IAS 251986, withdrawn in 2000)
PSAK 14
PSAK 15
PSAK 16
PSAK 17
PSAK 18
PSAK 19
PSAK 21
PSAK 22
PSAK 23
PSAK 24
PSAK 25
PSAK 26
PSAK 27
PSAK 28
PSAK 29
65
PSAK 32
PSAK 33
66
PSAK 35
PSAK 36
PSAK 37
PSAK 38
PSAK 39
PSAK 40
PSAK 41
PSAK 42
PSAK 43
PSAK 44
PSAK 45
PSAK 46
PSAK 47
PSAK 48
PSAK 49
PSAK 50
PSAK 51
PSAK 52
PSAK 53
PSAK 54
PSAK 55
Accounting for Derivative Instruments and Hedging Activities (revised 1999) (SFAS 1331998)
PSAK 56
PSAK 57
PSAK 58
PSAK 59
ISAK 1
ISAK 2
ISAK 3
ISAK 4
ISAK 5
ISAK 6
ISAK 7
67
68
B.1
IAS 1
Presentation of Financial Statements (as revised in 2007), effective for annual reporting
period beginning on or after 1 January 2009.
IAS 23
Borrowing Costs (as revised in 2007), effective for annual reporting periods beginning on or
after 1 January 2009.
IAS 27
Consolidated and Separate Financial Statements (as amended in 2008); the 2008
amendments become effective for annual reporting periods beginning on or after 1 July
2009.
IAS 32
Financial Instruments: Presentation; the amendments made by IAS 1 (as revised in 2007)
become effective for annual reporting periods beginning on or after 1 January 2009; the
amendment made by IFRS 3 (as revised in 2008) becomes effective for annual reporting
periods beginning on or after 1 July 2009.
IFRS 2
Share-based Payment (as amended in 2008) becomes effective for annual reporting periods
beginning on or after 1 January 2009; the amendments made by IAS 3 (as revised in 2008)
become effective for annual reporting periods beginning on or after 1 July 2009.
IFRS 3
Business Combinations (as revised in 2008) becomes effective for annual reporting periods
beginning on or after 1 July 2009.
IFRS 8
Operating Segments (issued in 2006) becomes effective for annual reporting periods
beginning on or after 1 January 2009.
IFRIC13
Customer Loyalty Programmes (issued in 2007) becomes effective for annual reporting
periods beginning on or after 1 July 2008.
B.2
PSAK 13
Investment Property (revised 2007) (IAS 402003), effective for annual reporting periods
beginning on or after 1 January 2008.
PSAK 16
Fixed Assets (revised 2007) (IAS 162003), effective for annual reporting periods
beginning on or after 1 January 2008.
PSAK 30
Leases (revised 2007) (IAS 172003), effective for annual reporting periods beginning on or
after 1 January 2008.
PSAK 50
Financial Instruments: Disclosure and Presentation (revised 2006) (IAS 322003), effective
for annual reporting periods beginning on or after 1 January 2009.
PSAK 55
69
kpmg.co.id
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavour to provide accurate
and timely information, there can be no guarantee that such information is accruate as of the date
it is received or that it will continue to be accurate in the future. No one should act upon such
information without appropriate professional advice after a thorough examination of the particular
situations
August 2008
70