You are on page 1of 3

Inney Silda Latifah

Accounting Theory

Financial Accounting Standards are the terms of reference in procedures relating to the
presentation of financial statements. Its existence is required to establish a common procedure in
explaining how financial statements are prepared and presented, thereby meaningful in terms of
language unity in analyzing financial reports for the company.

On the occasion This time I will discuss about the comparison of financial accounting standards that
have been used for a long time in Indonesia that we often call the PSAK with international standard
that is currently being discussed.

Before we discuss what is the difference between IFRS & SAK, of course We must first understand
what the definition of each standard of this financial statements

Understanding SAK

Financial Accounting Standards (SAK) is a framework in the procedure of making financial

statements in order to occur uniformity in the presentation of financial statements. Financial
Accounting Standards (SAK) is the result of the formulation of the Accounting Principles
Committee of Indonesia in 1994 replacing the Accounting Principles of Indonesia in 1984.
SAK in Indonesia is an application of several existing accounting standards such as IAS,
IFRS, ETAP, GAAP. In addition, there are also Sharia PSAK and also SAP.

In addition to the uniformity of financial statements, accounting standards are also required to
facilitate the preparation of financial statements, facilitate auditors and facilitate readers of
financial statements to interpret and compare the financial statements of different entities.

Understanding IFRS

IFRS is an international accounting standard issued by the International Accounting Standard

Board (IASB). The International Accounting Standards (IAS) are composed by four major
international organizations: the International Accounting Standards Board (IASB), the
European Commission (EC), the International Capital Market Organization (IOSOC), and the
International Accounting Federation (IFAC).

The International Accounting Standards Board (IASB), formerly known as the International
Accounting Standards Commission (AISC), is an independent institution to develop
accounting standards. The organization aims to develop and encourage the use of high
quality, understandable and comparable global accounting standards (Choi et al., 1999 in
Intan Immanuela,

From the above explanation, there must be a very basic question that is, what is the difference
between the two standards of the financial statements, and here are some of the differences
that we can see.

SOURCE PSAK No.1 ( Revisi 1998) Presentation of Financial

Statements IAS1,

BALANCE SHEET Requires presentation of Presentation is not current

current assets and non- assets or non-current assets,
current assets except for only when the presentation
certain industries such as of liquidity is more relevant
banks and reliable for certain items

Financial Performance Reports of Income A comprehensive income

statement statement

Income statement is the same as IFRS. There is no standard format

However, there are even though expenditures
differences in details on must be presented by
items presented on the selecting one of two formats
earnings received in advance

Cash Flow Statements Same with IFRS but in some Standard post but provision
(Formats and Methods) entities must use the direct is limited to its contents.
method Using the direct method or
indirect method

Extraordinary Items Outstanding post items still In IFRS is prohibited

to be reported

Presentation of recognized Recognized for the gains and Presents financial statements
gains and losses / other losses presented in the that recognize gains and
Comprehensive Income shareholders' equity change losses in separate notes or
statement notes on changes in
shareholder equity
Presentation Result of In particular does not require Using the equity method that
Associate Company the appointment of after-tax shows the after-tax stock
stock results results

Significant Disclosure of the Less disclosure compared to Provide detailed or

Association IFRS. Significant information significant information on
on unnecessary assets, assets, liabilities, revenues
liabilities, revenues and and outcomes
Financial Statement management Unregulated

Components of Financial Balance Sheet, Income Statements of financial

Statements Statement, Cash Flow position, Income statement