SLIDE 1:

Many of the UMKM have not carried out financial report according to predetermined
standards and there are even UMKM that not making a financial reports for their businesses.

As we know financial report is important to business , because Financial reports are used
to provide information about the financial position, cash flow and financial performance of a
company that useful for creditors and investors in example for making economic decisions

For some people Preparing financial reports according to predetermined standards is

considered difficult and complicated.

And To make it easier for UMKM players in preparing financial reports, the Indonesian
Institute of Accountants (IAI) prepared a new standard for UMKM, namely the Financial
Accounting Standards for Micro, Small and Medium Entities (SAK EMKM).

Because it is intended for UMKM players, the standards are made simplified and it is
hoped that UMKM can provide good financial report.

SAK UMKM is effective starting on January 1st , 2018.

SAK EMKM contains a simpler accounting arrangement compared to SAK E TAP.

The SAK EMKM aims to increase enforcement of transparency and accountability of

entity financial reporting while at the same time help to encourage the growth of the UMKM
sector in Indonesia.

Slide 2 :

The requirement of UMKM Financial Statements must be relevant, complete,

understandable, and comparative. In accordance with the SAK EMKM regulations, at least must
prepare the following three types of financial reports:

• Statement of financial position at the end of the period,

• Income statement during the period,

• Notes to financial statements, which contain additions and details of certain relevant
accounts
 Slide 3

The Statement of Financial Position summarizes the total assets of the business including
current, non-current and intangible assets. Then on the Liability side, there are liability accounts
such as trade payables and bank loans, and equity, namely share capital and retained earnings.

The Statement of Financial Position on UMKM is the same as for business entities in
general issued at the end of each accounting period. Simply put, the Financial Position Report
provides a comprehensive overview of the company's financial information.

So the main function of using the Statement of Financial Position is to identify current
economic trends and help to make a better financial decisions

Slide 4

Income statement

The UMKM Profit and Loss Report contains details of the income, financial expense, and
tax expense accounts. so that the Income Statement summarizes the total income and expenses
incurred by the business.

With the Income Statement, you can see if the business has made a profit or loss over a
certain period. The Income Statement period is usually determined monthly, quarterly, or
annually.

Profit and loss reports are needed by internal stakeholders (management team and board
of directors) and external stakeholders (investors and creditors).

They use the Income Statement to evaluate the profitability of the business and help
assess the level of financial risk of the business.
 Slide 5 :

Notes on financial statements prepared in SAK EMKM must contain:

• A statement that the financial statements have been prepared in accordance with the ED
SAK EMKM,

• Overview of accounting policies,

• And, additional information and certain account details that describe important and
material transactions so that it is useful for users to understand financial reports.

Any notes to financial statements are presented in a systematic manner as long as it is

practical. Each account in the financial statements cross-references to related information in the
notes to the financial statements in order to obtain accurate, accurate, and relevant information.

Slide 6 :

SAK EMKM provides many conveniences for companies compared to PSAK which has
more complex reporting requirements.

There are several benefits that can be obtained by UMKM members when using this
SAK, including:

1. The simplification of SAK EMKM help businesses to build financial report

preparation
2. UMKM also will be able to easily compile their own audited financial reports and
obtain an audit opinion. This will make it easier for UMKM to get loans from
external parties such as banks or other financial companies
3. SAK EMKM is designed dynamically to keep up with the times today. This allows
financial standards to be used for several years so that UMKM businesses no longer
need to be confused about finding financial reporting standards that are easy and
efficient.

So, With the adoption of this SAK EMKM, it is expected can help UMKM in preparing financial
reports properly and no longer having difficulties in compiling financial reports.

I think its enough, I hope you guys can understand about SAK EMKM and next is Naomi
turn as a debator to give any comment or question, for Naomi, time is yours..
 Debator :

Thankyou Naomi for the comment and its my mistake didn’t explain the detail of difference
from sak ETAP to SAK UMKM, and for the question can you give me a minute to answer ?

Okay I want to try answer naomi question that what criteria of umkm can using SAK
EMKM :

To distinguish a business whether it is a micro, small or medium-sized business, the

government is given a legal limit according to the criteria for each type of business based on the
circulation of the business and / or the number of assets owned as follows:

Micro Business Criteria are:

Micro enterprises have a net asset of not more than fifty million rupiahs, excluding land and
buildings for business premises or Have sales revenue at most three hundred million rupiah.

Small Business Criteria are:

Small-scale enterprises have net assets of more than fifty million rupiahs up to a maximum of
five hundred million rupiahs excluding land and buildings for business premise or Have annual
sales revenue of more than three hundred million rupiahs up to a maximum of two and a half
billion rupiahs

Medium Business Criteria are:

Medium Enterprises have a net asset of more than five hundred million rupiah up to a maximum
of ten billion rupiah excluding land and buildings for business; or Have sales revenue of more
than two billion five hundred million rupiah up to a maximum of fifty billion rupiah

And for next question : as we know this sak emkm is made for umkm because of Most
of these EMKMs are small business actors who have business prospects but do not have good
access to sources of funding, especially banks on the grounds that these EMKMs do not have
acceptable financial reports as a basis for banks or other financial institutions to be able to
provide loan funds.

so that a standard is made that makes it easier for these business actors so that their
financial reports can be accepted specifically for UMKM players

and also in my opinion, making financial reports is mandatory and important for every
business. So the establishment of this SAK EMKM is expected to provide convenience to
UMKM players in preparing financial reports that can become the basis for decision making by
UMKM management and other parties (banks, financial institutions, etc.)
 its my aswer for naomi qif you guys have any opinion related to Naomi question you can
tell us.

Pertanyaan :

1. Izzah : yes actually SAK ETAP is basically a derivative of PSAK. And SAK EMKM is a
simplified form of SAK ETAP which is specially made for MSMEs and SAK-EMKM is
aimed at entities that have not been able to meet the accounting requirements in
accordance with SAK-ETAP.

2. Dibah : if UMKM ignoring financial records and reports will result in MSME owners
being difficult to find out the company's net profit, so applying for loans to banks for
capital is difficult to obtain. Information in financial reports is also needed to evaluate
their business and can be used as a basis for decision making so that business actors are
advised and even obliged to prepare financial reports.

3. Epa : It is true, there are still many business actors who do not use SAK EMKM in their
reporting, this may be due to the lack of socialization regarding the implementation of
SAK EMKM which makes small and medium businesses still afraid to use SAK-EMKM.
This fear is also based on the fear of business people taking risks to change the existing
financial order from the start. Then Many entrepreneurs think that implementing SAK-
EMKM in their companies will not have an impact on their financial condition. This is of
course a big mistake. SAK-EMKM will help SME businesses to get loans from banks so
that the SME business will be more developed due to the capital injection.

4. Ades : ofcourse with sak emkm can increase the effectiveness and benefit to UMKM
because not only help a business to easier when making a financial report but it can help
business to get loans , and also The issuance of SAK EMKM is expected to be one of the
drivers of financial literacy of UMKM in Indonesia and expected to be the basis for the
preparation and development of accounting guidelines for UMKM engaged in various
business sector.