2018

REVENUE RECOGNITION AND

REVENUE MEASUREMENT IN
PT. BANK CENTRAL ASIA, TBK
BASED ON PSAK No.23

Yusuf Raharja (008201600066)

Capital Market (Mon 10.30)
Submitted in Partial Requirement of Accounting Theory Final Project

Final Project Accounting Theory 2018

Revenue Recognition and Revenue Measurement in BCA Based PSAK No. 23
12/18/2018
 Table of Contents
CHAPTER I (Introduction) ..............................................................................................................2
CHAPTER II (Literature Review) ...................................................................................................4
CHAPTER III (Framework Writing) ..............................................................................................6
CHAPTER IV (Analysis and Discussion) .......................................................................................7
CHAPTER V (Conclusion and Suggestion) .....................................................................................9
REFERENCES .................................................................................................................................10

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 CHAPTER I

INTRODUCTION

1.1. Background
Banking is at the core of each country's financial system. Therefore, the Bank as a
financial institution that helps the Government achieve prosperity has an important role in
increasing national development. The function of banking institutions is as a financial
intermediary between parties who need funds with parties who are excessively funded. In
addition, banks also function as intermediaries for payments. Therefore it can be said that the
bank is the lifeblood of the financial system which is active in receiving deposits from the
public in the form of savings, current accounts, deposits etc., which then funds collected from
the community are channeled back to the community in the form of credit.
In each accounting period the company will generally make financial statements.
Based on reports made, interested parties in the company can see the company's financial
position and management can take policies for the continuity of the company for the future.
Financial statements are part of financial reporting which consists of several elements, namely
balance sheet, income statement, statement of changes in equity, cash flow statements and
notes to financial statements. Compiling financial statements is an important basis for
knowing the company's financial performance which includes revenues and expenses.
Revenue is a key element and fundamental to reporting on a firm’s activities. Revenue
Recognition is an important thing to determine when an income is recognized as revenue.
Revenue accounting analysis is an analysis carried out on the recognition, measurement, and
presentation of revenue is very important to get a reasonable profit and loss.
Even though determining revenue is important, measurement is not always easy
because of the many types of industrial models available. This research will be conducted at
PT. Bank Central Asia which is a Private Bank. Choosing research at PT. Bank Central Asia
because it is a Well-known and Big private bank that already advanced so that it is possible to
analyze the presentation of financial statements in the accounting practices of PT. Bank
Central Asia Bank mainly on revenue recognition. Based on the statement, the author chose
this topic for the final project of Accounting Theory with the title: Revenue Recognition and
Revenue Measurement PT. Bank Central Asia Based on PSAK No. 23.

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1.2. Problem Statement
Based on the explanation of the background section, the problem that will be discussed
in this article is determine What the method revenue recognition and revenue measurement
applied by PT Bank Central Asia, TBK is and What the recognition and measurement of
income applied by PT Bank Central Asia, TBK in accordance with PSAK No.23 is.
1.3. Article Purposes
According to background section and problem statement, this article is written with the
purpose of:
a. Determining the revenue recognition of by PT Bank Central Asia, TBK.
b. Determining Revenue measurement of by PT Bank Central Asia, TBK.
c. Comparing the theory with practical related to the revenue measurement and recognition
in by PT Bank Central Asia, TBK based on PSAK No. 23.

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 CHAPTER II
LITERATURE REVIEW

2.1. Definition of Revenue

(Godfrey, 2010) stated that revenue represents a physical and a monetary flow.
Revenue has been defined by standard setters as an inflow of economics benefits. The
behavioural view of revenue suggest that revenue (and profit) come about because of
something done by the firm. All the firm’s activities form part of its earning process, apoint
for recognising revenue must be determined.
2.2. Revenue Recognition and Measurement according to the Statement of Accounting
Standards (PSAK) No.23
1. Revenue Recognition
The provisions of PSAK No.23 (2007, p.23.6) concerning the recognition of
income for services sale transactions are as follows: if a transaction that includes the
sale of services can be estimated reliably, revenue in connection with the transaction
must be recognized with reference to the level of completion of the transaction at
balance sheet date ". What is meant reliably according to PSAK No.23 (2007, p.23.6) is
if all the conditions below are met:
a. The amount of income can be measured reliably;
b. It is probable that the economic benefits associated with the transaction will be
obtained by the company;
c. The level of completion of a transaction at the balance sheet date can be
measured reliably; and
d. Costs incurred for the transaction and costs to complete the transaction can be
measured reliably.
2. Revenue Measurement
The Indonesian Institute of Accountants (2009) defines measurement as the process
of determining the amount of money to recognize and include every element of
financial statements in the balance sheet and income statement. This process concerns
the selection of certain bases. PSAK No. 23 paragraph 8 states that income is measured
by the fair value of the benefits received or acceptable. The amount of income arising

FINAL PROJECT ACCOUNTING THEORY 2018 4

 from transactions is usually determined by the agreement between the entity and the
buyer or user of the asset. The amount is measured by the fair value of the benefits
received or received by the entity minus the amount of trade discounts or volume
rebates allowed by the entity.
Based on PSAK No.23, a company can make a reliable estimate of the income that
will be received after the company reaches agreement with other parties in the
following matters:
a. The rights of each party whose implementation can be enforced by the
force of law relating to the services provided and received by these
parties.
b. Rewards that must be exchanged.
c. Ways and terms of payment and settlement
Financial Accounting Standards (2007, p. 23.3) state that income must be measured
by the fair value of received or acceptable benefits. The further explanation of the
statement stated by the Financial Accounting Standards (2007, p. 23.3) is the amount of
income that relatively arises from a transaction by agreement between the company and
the buyer or user of the asset. The amount is measured by the fair value of the benefits
received or received by the company minus the merchandise discounts and volume
rebates allowed by the company. In general, the benefits are in the form of cash or cash
equivalents and the amount of income is the amount of cash or cash equivalents
received or acceptable. However, if the inflows from cash or cash equivalents are
deferred, the fair value of the benefits may be due to the nominal amount of cash
received or acceptable.
3. Previous Research
a. According to Synthia Marcella (2014) in her research entitled Analysis of
Recognition and Measurement of Income Based on PSAK No. 23 At PT Pandu
Siwi Sentosa Palembang. The results showed that the income measurement of PT
Pandu Siwi Sentosa based on the fair value of the benefits received or that could be
received in the form of cash or cash equivalents was in accordance with financial
accounting standards, because so far the company recognized income based on
rupiah units. This is in accordance with PSAK No. 23

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 CHAPTER III
WRITING FRAMEWORK
3.1. Framework
Every type of industry has different accounting treatment. So that bank also has
accounting treatment itself. The main purpose of the bank to carry out the activities of using
funds or investing funds is to earn income in the form of income. Bank income must
absolutely exist to guarantee the continuity of the bank concerned. According to Hasibuan
(2009: 99) bank income is If the amount of income received is greater than the amount of
expenditure (costs) incurred.
The income obtained by the bank will have the opportunity to increase profitability
and will affect the percentage of performance achieved by a bank. The income services
obtained by banks for the products and services provided to the public according to Kasmir
(2008: 120) can be divided into two groups, Interest income and non-interest income (fee
based income). Each will explained as follows:
1. Interest income
The income earned in the form of interest on the provision of credit as a channel of
funds to the public both individuals or business entities and also the placement of funds
to other banks.
2. Fee based income
Fees, fees or commissions obtained by banks that are not interest income. This income
can also be obtained from product marketing and banking services transactions.
Hasibuan (2009: 100) suggests that the source of bank income comes from Credit
interest distributed by the bank concerned, Other costs across payments,Sales of check
books, demand deposits, deposits, and deposit notes, Rent a safe deposit box,
Commission and provision, Forex trading, Shrinkable inventory sales, Call money
market, Share agio, And others.
Recognition of accrual income results in an increase in bank income at the time of
interest fall. While the recognition of income on a cash basis causes an increase in the
administrative account of interest arrears at the time of maturity of interest payments and
income will increase when the money has actually been received by the bank from the non-
performing customer.

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 CHAPTER IV
ANALYSIS AND DISCUSSION
4.1. Sources and Types of Income PT Bank Central Asia
The PT Bank Central Asia’s recognizes revenue based on the time of the transaction
(Accrual Basis). In running its business, PT Bank Central Asia generates revenue from
interest income (Interest Income from Loans, Interest Income from Placements with Bank
Indonesia and Other Banks, Interest Income from Securities, Interest Income from
Consumer Financing and Leasing, Other interest income ) and Operating income other than
interest (Earning Assets Yield, Fee and Commission Income, Customer deposit income,
Administrative income from credit cards, Trading Income, Swap Premium Income, Other
Operating).
4.2. Analysis of Revenue Recognition of PT. Bank Central Asia
PT Bank Central Asia's revenues are grouped into interest income and operating
income other than interest. The Bank and Subsidiaries initially recognise loans receivable
and deposits on the date of origination. Regular way purchases and sales of financial assets
are recognized on the trade date at which the Bank and Subsidiaries commit to purchase or
sell the asset. All other financial assets and liabilities are initially recognised on the trade
date at which the Bank become a party to the contractual provisions of the instrument.
Application of revenue recognition at PT. Bank Central Asia is in accordance with
PSAK No. 23 concerning Revenue, where PSAK No. 23 only recognizes two methods,
which is Cash basis and Accruals Basis. Accrual basis is used to measure assets, liabilities
and fund equity. Thus an accrual basis is an accounting basis that recognizes the effects of
transactions and other events when the transactions and events occur regardless of when
cash or cash equivalents are received or paid. Recognition of income occurs if there is a
transaction, at first the customer comes to the company to do it. After the customer agrees,
he will first make an agreement with the company. After the agreement between the
customer and the company, there will be income for the company where the income is
recognized when a transaction occurs.
PT. Bank Central Asia uses the accrual basis method because Revenues and
expenses are recognized when the transaction occurs and the information provided is more
reliable, reliable even though cash has not been received. Second it is widely used by large

FINAL PROJECT ACCOUNTING THEORY 2018 7

 corporations (in accordance with Financial Accounting Standard Conditions which require
a company to use an acural basis). Third An increase in company income because cash that
has not been received can be recognized as income. That the existence of cash that has not
been received by the company is recognized as a receivable but will generate income.
4.3. Analysis of Revenue Measurement of PT. Bank Central Asia
Bank Central Asia measure the fair value of financial instruments using the
valuation techniques or quoted price of an active market for that instrument The best
evidence of the fair value of financial transactions, i.e., the fair value of consideration given
or received. If the transaction price and the fair value are evidenced by a quoted price of an
active market for an identical asset or liability based on a valuation technique that uses only
data from observable markets, then the financial instrument is measured at a fair value, an
adjusted to defer the difference between the initial value and the initial transaction price.
Application of revenue measurement at PT. Bank Central Asia is in accordance with
PSAK No. 23 that contain about income must be measured by fair value received or
acceptable. The amount of income arising from a transaction is usually determined by the
agreement between the company selling goods and services and the buyer or consumer. The
amount must be measured by the fair value of the compensation received or acceptable to
the company minus the amount agreed upon.
Second Revenue Measurements is the measurement from interest income and
operating income other than interest is to use the exchange rate is the best measure to find
out the proceeds from bank services. The exchange rate is measured in rupiahs, not in other
foreign currencies. PT Bank Central Asia uses the exchange rate for the provision of
services is the measure to be received when cash is received. Revenues from the sale of
these services are considered reasonable.
PT. Bank Central Asia is in accordance with the standard financial accounting,
because so far the company recognizes income based on rupiah. Then the transactions that
are valid in foreign currencies will be adjusted to the standard exchange rates prevailing at
the time of the transaction. Thus Revenues from bank services (the interest income from
loan, etc) are considered reasonable.

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 CHAPTER V
CONCLUSSION AND SUGGESTION
4.1. Conclussion
Based on the discussions from previous chapters, the conclusions that can be given
in accordance with the research at PT Bank Central Asia are as follows:
1. PT Bank Central Asia's revenues are grouped into interest income (Interest Income
from Loans, Interest Income from Placements with Bank Indonesia and Other Banks,
Interest Income from Securities, Interest Income from Consumer Financing and
Leasing, Other interest income ) and operating income other than interest (Earning
Assets Yield, Fee and Commission Income, Customer deposit income, Administrative
income from credit cards, Trading Income, Swap Premium Income, Other Operating).
2. PT Bank Central Asia in the revenue accounting policy that the company recognizes
revenue based on the time of the transaction (Accrual Basis). Application of revenue
recognition at PT. Bank Central Asia is in accordance with PSAK No. 23 concerning
Revenue, where PSAK No. 23 only recognizes two methods, which is Cash basis and
Accruals Basis.
3. Application of revenue measurement at PT. Bank Central Asia is in accordance with
PSAK No. 23 that contain about income must be measured by fair value received or
acceptable.
4. PT. Bank Central Asia is in accordance with the standard financial accounting, because
so far the company recognizes income based on rupiah. Then the transactions that are
valid in foreign currencies will be adjusted to the standard exchange rates prevailing at
the time of the transaction.
4.2. Suggestion
1. As the biggest private bank in Indonesia, PT Bank Central Asia have been applied the
Revenue Recognition and Revenue Measurement based on PSAK No. 23. It is
Expected that the company will continue to do so in managing its finances.
2. For the future research, it is better to add other variables outside the variables beyond
those that have been studied on the revenue recognition and revenue measurement
according to PSAK No.23.

FINAL PROJECT ACCOUNTING THEORY 2018 9

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