Accepted Manuscript

Title: The Pathway of Transition to International Financial

Reporting Standards (IFRS) in Developing Countries:
Evidence from Indonesia

Authors: Agus Fredy Maradona, Parmod Chand

PII: S1061-9518(17)30074-5
DOI: https://doi.org/10.1016/j.intaccaudtax.2017.12.005
Reference: ACCAUD 232

To appear in: Journal of International Accounting, Auditing and Taxation

Please cite this article as: Maradona, Agus Fredy., & Chand, Parmod., The Pathway
of Transition to International Financial Reporting Standards (IFRS) in Developing
Countries: Evidence from Indonesia.Journal of the Chinese Institute of Chemical
Engineers https://doi.org/10.1016/j.intaccaudtax.2017.12.005

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The Pathway of Transition to International Financial Reporting Standards (IFRS) in
Developing Countries: Evidence from Indonesia

Agus Fredy Maradona

Department of Accounting and Corporate Governance
Macquarie University, Sydney, NSW, Australia
and Department of Accounting
Universitas Pendidikan Nasional, Denpasar, Bali, Indonesia
Email: agus.maradona@hdr.mq.edu.au

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Phone: +61 414258488

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Parmod Chand*

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Department of Accounting and Corporate Governance
Macquarie University, Sydney, NSW, Australia
Email: parmod.chand@mq.edu.au
Phone: +612 9850 6137
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*Corresponding author
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Abstract
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This study adds to the current discourse about the pathway of transition to International
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Financial Reporting Standards (IFRS) in developing countries. We examine the dynamics of

accounting standard development in Indonesia with emphasis on the process of convergence
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of the country’s national accounting standards and IFRS. Using teleological process theory as
a theoretical lens, this study finds that different sets of objectives have initiated and directed
the changes in Indonesian accounting standards since their early development to the
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implementation of current convergence programmes. Based on Indonesia’s experience, we

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also highlight several issues and challenges in the gradual implementation of IFRS. The
insights provided are potentially useful in determining the success of the current IFRS
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convergence programmes undertaken in other jurisdictions.

Keywords: Accounting standards; IFRS; accounting convergence; process theory; developing

countries; Indonesia
1.0 Introduction

The convergence of global accounting standards initiated by the International Accounting

Standards Board (IASB) has gained widespread support from numerous national accounting
bodies as well as international organisations. The number of countries which have adopted the
International Financial Accounting Standards (IFRS) has grown steadily in the last decade,
with many others stating an intended commitment to adopt IFRS (Pacter, 2016). Countries in

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the European Union and Australia are the forerunners of IFRS adoption, having implemented

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IFRS since 2005. The global acceptance of IFRS showed further significant progress in 2008

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when the United States (US) Securities and Exchange Commission (SEC) permitted foreign
companies listed on the New York Stock Exchange to use IFRS to submit their financial

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statements without making reconciliations with US Generally Accepted Accounting Principles
(GAAP). Currently more than 130 countries have adopted IFRS (Pacter, 2016), which implies

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that the goal of a single accounting language in the world is gradually materialising.
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Although the first countries to adopt IFRS were mainly developed countries characterised by
advanced capital markets and large numbers of multinational corporations, IFRS are now also
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being implemented by developing countries with emerging capital markets. The adoption of
IFRS by developing countries has raised concerns over the suitability of these standards for
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such economies, as it has long been argued that the financial reporting environment in
developing countries differs significantly from that of advanced countries such as the US and
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the UK to which international standards are oriented (see e.g. Perera, 1989; Hove, 1990;
Hoarau, 1995; Larson and Kenny, 1996; Chamisa, 2000; Mir and Rahaman, 2005).
Accordingly, a number of studies have sought to examine the relevance of IFRS for developing
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countries and to identify the reasons why developing countries adopt IFRS despite the
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awareness that these standards might not be relevant to their countries (e.g. Mir and Rahaman,
2005; Zeghal and Mhedhbi, 2006; Tyrral et al., 2007; Zehri and Chouaibi, 2013; Hassan et al.,
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2014).

Understanding the process of IFRS adoption in developing economies is crucial because the
process through which IFRS are adopted significantly influences the relevance and importance
of IFRS in these countries (Mir and Rahaman, 2005). Moreover, with IFRS having gained
international recognition, the real issue concerning IFRS convergence is not the relevance of

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IFRS to a particular country, but rather the “pathway of change” by which IFRS are adopted
(Tyrrall et al., 2007). To address the gap in the literature, we investigate the process of IFRS
convergence in Indonesia. Indonesia is one of the developing economies currently engaged in
the process of convergence of its national accounting standards with IFRS. In 2008 the
Indonesian Institute of Accountants (Ikatan Akuntan Indonesia—IAI), the national accounting
profession body that oversees the setting of accounting standards in Indonesia, formalised its
commitment to the full convergence of IFRS in the country (Deloitte Touche Tohmatsu, 2009).
Since then, the Indonesian accounting standard setter began the gradual adoption of IFRS, with

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the intention of ensuring that Indonesian accounting standards would be fully converged with

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IFRS by 2012.

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Indonesia provides an interesting example of how IFRS is adopted in a developing economy

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as the country takes a careful approach to IFRS convergence. Unlike the ‘big-bang’ adoption
approach in the European Union member countries, Australia, or certain developing

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economies, IFRS adoption in Indonesia follows a gradual process, in which selected IFRS are
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adopted progressively and published as Indonesian equivalents of IFRS.
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To capture the dynamics of the Indonesian IFRS convergence programmes, this study employs
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process theory as a theoretical lens. Process theory provides a comprehensive framework for
explaining the reasons why an organisation undergoes changes and how those changes are
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embraced by the organisation (Van de Ven and Poole, 1995). Process theory has been
developed in the management literature based on a synthesis of theories originating from both
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social and natural sciences (see Van de Ven, 1992; Van de Ven and Poole, 1995), and has been
used extensively in the study of organisational change (see Cunha and Da Cunha, 2003).
Adopting process theory to examine IFRS convergence enables this study to identify the forces
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advocating change and the development of accounting standards in Indonesia, and to follow
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the sequence of events in Indonesian accounting standard history that have led to the recent
adoption of IFRS. Furthermore, using process theory to frame the analysis also enables this
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study to highlight the issues that might determine the success of the current IFRS convergence
programmes undertaken in other jurisdictions.

Our analysis shows that the Indonesian accounting standards have developed over three
different periods since their initial formulation, and the objectives of the standard-setting
initiatives in each period had substantially determined the pathway of changes of the standards

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over time. The ultimate objective of the standard-setting agenda in the current period is full
convergence with IFRS, of which the Indonesian standard setter body aims to attain gradually
through several phases of convergence. Our analysis also identifies the main issues that are
likely determine the success of the IFRS convergence initiatives in Indonesia. These include:
the readiness of accountants to implement IFRS-equivalent standards that are perceived to be
complex; the ability of accountants to use their professional judgements when applying the
standards; the availability of IFRS training and education programmes to familiarise
accountants with the newly-adopted standards, and the ability of the standard-setting body to

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eliminate the differences between the Indonesian standards and IFRS in a timely manner.

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Our study makes three main contributions. First, we extend previous research on the relevance
of IFRS in developing countries by highlighting the way through which IFRS are adopted in a

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developing country. Second, our study underlines the main issues that potentially hinder the
successful implementation of IFRS when the standards are adopted gradually with

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modifications in a non-English speaking country. Lastly, our study contributes to accounting
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standard setters in other developing countries or regions to assist in determining and evaluating
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the convergence process as they move towards IFRS.
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The remainder of this paper proceeds as follows. Section 2 describes the theoretical framework
used in this study. Section 3 describes the Indonesian accounting environment followed by
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Section 4 that outlines the process of developing accounting standards in Indonesia. Section 5
describes the pathways of convergence of Indonesian accounting standards with IFRS and
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Section 6 outlines the challenges and issues in IFRS convergence process. Section 7 concludes
the paper.
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2.0 Theoretical Lens

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Accounting standards in any country do not develop at a single point in time; rather, they evolve
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progressively. As such, structural changes have occurred at different stages in the development
of accounting standards in all countries (Baylin et al., 1996). The current trend towards the
adoption of IFRS represents an important progression in the accounting standard development
agenda in many jurisdictions. Our study focuses on the convergence process of Indonesian
national accounting standards and IFRS. In the context of this study, ‘process’ is referred to as
“a sequence of events or activities that describes how things change over time, or that represents

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an underlying pattern of cognitive transitions by an entity in dealing with an issue” (Van de
Ven, 1992, p.170). This paper uses process theory as a theoretical lens to examine the
development of accounting standards in Indonesia and to highlight the current Indonesian IFRS
convergence process. Van de Ven and Poole (1995, pp.512, 513) define process theory as “an
explanation of how and why organisational entity changes and develops”, and classify various
theories of development and change into four basic categories: life-cycle, teleology, dialectics,
and evolution theories.

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The appropriateness of process theory for a study of accounting convergence has been shown

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by Peng and van der Laan Smith (2010) who provide an examination of the convergence

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process in China using teleological process theory as a theoretical framework. Peng and van
der Laan Smith (2010) maintain that process theory is useful in analysing the dynamics of the

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transition to IFRS since this theory offers a framework for understanding accounting standard
convergence by underlining patterns and practices that emerge during different phases of

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accounting standard development. Another study using a theoretical framework that originates
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from the family of process theories has been conducted by Rodrigues and Craig (2007),
although the study does not specifically use the term ‘process theory’. Rodrigues and Craig
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(2007) use Hegelian dialectic, which belongs to dialectic process theory, to examine the
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processes and progress of international accounting convergence by identifying the support for
IFRS convergence (the thesis), resistance to the global use of IFRS (the antithesis), and the
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reconciliation between the two conflicting views (the synthesis).

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Of the four schools of thought within process theory as suggested by Van de Ven and Poole
(1995), teleological process theory is employed in this paper to frame the analysis. This
theoretical lens is chosen because teleological process theory emphasises the importance of
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goals in explaining change and development, and assumes that goals are constantly
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reformulated. It is argued in this study that Indonesian accounting standard-setting programmes

have mainly been initiated, and are directed, by the need to achieve certain ultimate goals.
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These standard development programmes have followed different regimes in which different
sets of objectives have been repetitively formulated under each regime (see ADB, 2003; IAI,
2012). Teleological process theory enables this study to unfold the sequence of events which
represents changes in the standard-setting process and objectives, and to highlight different
patterns in the standard formulation over time. Furthermore, since teleological theory facilitates
an assessment of whether a change process has moved towards its ultimate goals (Van de Ven,

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1992; Van de Ven and Poole, 1995), its use as a theoretical framework allows this study to
capture the challenges and obstacles that have emerged, particularly in the period of transition
to IFRS.

3.0 Indonesian Accounting Environment

3.1 Accounting Regulatory Framework

The regulations concerning financial reporting in Indonesia are mainly prescribed in the

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Indonesian Commercial Code and the Limited Company Act. The commercial code, which is

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based on the 1838 Dutch Commercial Code (Silondae and Ilyas, 2011), requires companies to

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keep accounts concerning their assets and liabilities, and to prepare a statement of balance sheet
within six months of the financial year end. However, the code does not have specific

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requirements concerning the procedures or standards that should be followed in preparing the
accounts and presenting the balance sheet. More detailed financial reporting requirements are

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specified in the current Limited Company Act, published in 2007.1 The act requires limited
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liability companies to present financial statements that at least consist of a statement of balance
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sheet, statement of profit and loss, statement of cash flow, statement of changes in equity and
notes to financial statements, and stipulates that the financial statements must be prepared
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based on accounting standards set by the authorised accounting professional organisation in

Indonesia. In addition, the act specifies certain criteria regarding the auditing of financial
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statements by public accountants.

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Apart from the Limited Company Act, specific accounting regulations are also promulgated by
a number of state and government bodies, including the Indonesian Financial Service Authority
(Otoritas Jasa Keuangan—OJK) and the Indonesian Tax Office of the Ministry of Finance.
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The OJK specifies financial reporting requirements that must be met by the financial industry
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and publicly held companies listed in the Indonesia Stock Exchange. Meanwhile, the task of
the Tax Office is mainly to set specific guidelines for companies for the calculation and
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reporting of income taxes, based on Indonesian tax laws.

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The Limited Company Act was first introduced in 1995.

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3.2 Accounting Profession
The first step in the development of the accounting profession in Indonesia was the enactment
of the Accountant Designation Act in 1954, which regulates the use of the professional
accountant designation and the provision of public accounting services by professional
accountants. The year 1957 saw the establishment of the Indonesian Institute of Accountants
(Ikatan Akuntan Indonesia—IAI), the first professional accounting association in Indonesia
(Tuanakotta, 2007). The institute was established to advance the accounting profession and the

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practice of accountancy in Indonesia, which in the 1950s was still in its infancy. After a number

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of organisational restructures, the present organisational structure of IAI consists of three

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divisions: the Division of Public Sector Accountants, which focuses on public sector
accounting practices; the Division of Academic Accountants, which focuses on accounting

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education and research; and the Division of Tax Accountants, which focuses on education,
research, and practices in the field of taxation.

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In December 2012, the IAI introduced its current professional accounting qualification
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programme, i.e. the Chartered Accountants (CA) of Indonesia. An individual is granted the CA
qualification after they have passed the CA examination administered by the Institute and
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satisfied certain minimum work experience requirements. To signify this professional

qualification programme, in December 2014 the IAI changed its name from the Indonesian
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Institute of Accountants to the Institute of Indonesia Chartered Accountants. A person who

holds the CA qualification from the IAI is eligible to be registered in the State Register of
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Accountants administered by the Indonesian Ministry of Finance and to attain the registered
accountant status. In accordance with Ministry of Finance regulations, registered accountants
are permitted to provide professional services to the public through accounting services firms
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(kantor jasa akuntansi—KJA), but those services are limited to non-assurance services.
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Apart from the IAI, there are two other professional associations that constitute the Indonesian
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accounting profession, namely the Indonesian Institute of Certified Public Accountants

(Institut Akuntan Publik Indonesia—IAPI) and the Indonesian Institute of Management
Accountants (Institut Akuntan Manajemen Indonesia—IAMI). The IAPI is a specialised public
accountant association that supervises the audit profession in Indonesia. The IAPI administers
the Indonesian Certified Public Accountant (CPA) examination programme and grants the
CPA qualification to those who have passed all levels of the examination and satisfied the

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minimum work experience requirements. This qualification is a prerequisite for an individual
to become a public accountant in Indonesia and to provide assurance services to the public
through a public accounting firm (kantor akuntan publik—KAP).

Meanwhile, the IAMI is a specialised professional management accountant association. The

membership base of the IAMI is quite large because it is not limited to those who hold
professional accountant qualifications or formal accounting education background. The IAMI
organises the Certified Professional Management Accountants (CPMA) examination and

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grants the CPMA qualification to candidates who have passed the examination and satisfied

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certain minimum work experience requirements. The CPMA qualification programme focuses

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mainly on the competency of professionals in the management accounting field, and this
qualification does not lead to a professional licence to engage in public practice.

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The development of the accounting profession in Indonesia, aside from professional

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organisations, has also been associated with state and government bodies. At least two
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institutions directly affect the accounting profession, namely the Ministry of Finance and the
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OJK. The Ministry of Finance is a government body that supervises and oversees the public
accounting profession in Indonesia. Among its duties are the registration of accounting
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professionals who, based on the 1954 Accountant Designation Act, are eligible to hold the
registered accountant status. The Ministry of Finance is also responsible for setting government
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policy related to the profession. In overseeing the accounting profession, the ministry has the
authority to issue the practice licences of Indonesian CPAs and CAs, license public accounting
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firms and accounting services firms, conduct investigations into potential violations, impose
administrative sanctions, and even to revoke the practice licences of registered accountants and
public accountants.
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Meanwhile, the OJK is a state body that oversees the Indonesian capital market and financial
sector. As part of its function in supervising the capital market and financial industry, the OJK
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has the authority to license public accountants and public accounting firms that are authorised
to provide assurance services for public listed companies and commercial banks.

4.0 Development of Accounting Standards in Indonesia

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In this section, we examine the development of accounting standards in Indonesia since the
initial periods of the standard formulation until the present time. Using the teleological process
theory to frame our analysis, we focus on examining the sequence of events that explain
significant changes in the accounting standards, and identifying different patterns of standard
setting orientation. We also focus on highlighting different objectives of standard setting
initiatives that have directed changes in the accounting standards over time.

Accounting standard development in Indonesia has evolved over four decades and can be

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defined by three distinct periods. The first period, from 1973 to 1990, covers the early

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formulation of accounting standards that led to the publication of the first codified modern

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accounting standards in the country. The second period, 1990-2007, is the period in which
Indonesia strived to maintain the credibility and relevance of its accounting standards by

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aligning with international best practice while at the same time taking into consideration local
needs. The final period, from 2007 to 2016, covers the period of transition to IFRS, in which

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the country’s standard setters have embarked on a gradual IFRS convergence programme in
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several phases. A detailed analysis of the accounting standard development over the three
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periods is provided in the following sub-sections, and a summary of this analysis is presented
in Figure 1.
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4.1 The early stage of Indonesian accounting standard development (1973-1990)

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The early accounting system in Indonesia after the country gained its independence from The
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Netherlands was substantially affected by the Dutch system, which had been applied since
colonisation. Dutch influences were reflected in the early financial reporting requirements
prescribed in Indonesian company law, but following the economic and political reforms
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started in 1967, there was a shift in accounting practice orientation from the Dutch system to
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the US system in the 1970s.

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The initial development of modern accounting standards in Indonesia can be traced back to
1973, when the IAI appointed a special committee for the establishment of a set of Indonesian
accounting standards. At that time, accounting standard development was part of a government
programme aimed at reactivating the Indonesian capital market from its hiatus. The Money and
Capital Markets Preparation Team, an advisory body under the Governor of the Indonesian
central bank, supervised all the capital market preparation programmes and coordinated with

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the IAI in formulating accounting standards. The standard-setting process led to the publication
of the Indonesian Accounting Principles (Prinsip Akuntansi Indonesia—PAI) by the IAI in
1973. This pronouncement was the first set of codified Indonesian accounting standards to be
developed that were largely based on US GAAP (ADB, 2003; Kusuma, 2005). Following this
publication, the IAI established a permanent standard-setting body within the organisation
structure called the Indonesian Accounting Principles Committee (Komite Prinsip Akuntansi
Indonesia—KPAI) in 1974. The KPAI continued the work of formulating Indonesian
accounting standards by revising the newly-issued PAI-1973. After a significant revision of

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PAI-1973 had been completed, the IAI published the second edition of PAI in 1984. This was

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a response to the government’s intention to accelerate Indonesian capital market reform in the

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mid-1980s. However, the newly-revised accounting principles were considered inadequate as
the standards still allowed latitude for financial statement preparers to interpret the

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requirements prescribed in the standards when preparing their financial statements (Rosser,
1999).

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Accounting standard formulation from the 1970s to the late 1980s may be seen as the
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foundation stage of standard development for Indonesian accounting standards, because this
period saw a major shift in the accounting standard model and the standard formulation
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mechanism. The pathways of changes in the accounting standards during this period reveals
that the goal of producing a set of accounting standards as part of the capital market
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revitalisation programme was the main impetus for the progression of accounting standard-
setting. This objective had drastically moved accounting standard orientation away from the
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Dutch colonisation system to the US accounting system.

The importance of the capital market reactivation programme in fostering the progress of
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standard development was evident from the close association between the transition stage of
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capital market advancement and the accounting standard-setting process. When the capital
market programme slowed between the mid-1970s and early 1980s due to the lack of
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government incentive, the accounting standard-setting agenda also decelerated (Rosser, 1999).
In spite of this low incentive, however, the first stage of the accounting standard development
programme had achieved its objective through the publication and revision of the PAI. A
subsequent boom in the capital market sector in the late 1980s had once again hastened the
standard-setting agenda and caused the standard setters to reformulate their objectives. As a
result, the change and development of accounting standards continued in the ensuing periods.

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4.2 The advancement of Indonesian accounting standards (1990-2007)
The second period in Indonesian accounting standard development started in the early 1990s,
fuelled by significant progress in the development of the Indonesian capital market at that time.
By the early 1990s, more than 200 firms traded their shares in the Jakarta Stock Exchange, a
substantial increase from 24 companies in the mid-1980s (ADB, 2003).2 The IAI responded to
this growth by making major changes to the accounting standard-setting process (Rosser, 1999;

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ADB, 2003). First, the KPAI was reorganised into the Indonesian Financial Accounting

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Standards Committee (Komite Standar Akuntansi Keuangan—KSAK) in 1994. Second, the

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IAI transformed the basis of accounting standard-setting in the same year from the US GAAP
to the International Accounting Standards (IAS) and made a formal decision to support the

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harmonisation programme initiated by the International Accounting Standards Committee
(IASC). This move was evident from the direct adoption of the IASC Framework for

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Preparation and Presentation of Financial Statements and the publication of a new set of
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Indonesian Financial Accounting Standards in 1994. The new accounting standards were
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adapted from the IAS standards, among others. Apart from these changes, Indonesia also ran
the Second Accountancy Development Project with funding assistance from the World Bank,
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with the aim of enhancing the accounting regulations in Indonesia and increasing the
competency of Indonesian accountants.
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In an attempt to strengthen the standard-setting body in Indonesia, the KSAK was subsequently
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restructured in 1998 into the Indonesian Financial Accounting Standard Board (Dewan Standar
Akuntansi Keuangan—DSAK) (ADB, 2003). The newly-established standard setter has greater
power than its predecessor because it has been granted authority to set and endorse the
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statement of financial accounting standards and the interpretation of financial accounting

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standards. This authority makes the DSAK an autonomous accounting standard setter within
the IAI’s organisational structure. In addition, the new standard setter has a stronger structure
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than ever before, since the board comprises representatives from the public accounting
profession, academics, industry, central bank, and government. In 1998, the IAI also
established the Indonesian Financial Accounting Standards Advisory Council (Dewan

2
Until 2007, there were two stock exchanges in Indonesia, namely Jakarta Stock Exchange and Surabaya Stock
Exchange. The two stock exchanges merged into a single bourse, the Indonesia Stock Exchange, which started its
operation on 1 December 2007.

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Konsultatif Standar Akuntansi Keuangan—DKSAK), which serves as the advisor for the
DSAK. Currently, both the DSAK and the DKSAK continue to be the main players in
Indonesian accounting standard development.

The second period of accounting standard development in Indonesia can be seen as the
improvement phase because its main objective was to enhance the quality of Indonesian
accounting standards. The standard-setting agenda focused on eliminating the shortcomings of
the previous version of the standards and making the standards more contextually relevant in

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relation to the recent growth of the capital markets. The Indonesian accounting standard setters

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strived to achieve this objective by moving Indonesian accounting standards closer to IAS. The

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sequence of the revisions in Indonesian accounting standards in this period therefore reflected
a change towards harmonisation between Indonesian accounting standards and the IAS,

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although the influence of the US GAAP remained substantial. Between 1994 and 2007, the IAI
published six revisions of the Indonesian accounting standards codified pronouncements.

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These revisions were largely to accommodate amendments to previous standards and also to
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add new accounting standards to deal with changes in the business environment. As of January
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2007, the Indonesian accounting standards pronouncement consisted of 57 effective Statements
of Financial Accounting Standards (PSAK), along with seven Interpretations of Financial
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Accounting Standards (ISAK). Of these standards, 28 PSAKs were developed based on IAS
standards, 20 PSAKs referred to U.S. GAAP, eight PSAKs were self-developed by the DSAK,
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and one PSAK concerning shari’a banking referred to the Accounting and Auditing
Organisation for Islamic Financial Institutions.
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4.3 The convergence period (2007-2016)

The development of Indonesian accounting standards since 1994 has followed the progress of
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international accounting standard-setting, thus the international convergence of IFRS has

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inevitably affected the DSAK’s strategy in formulating Indonesian accounting standards. In

2004 the IAI stated its early intention to support the IASB convergence programme, and this,
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to some extent, was reflected in the Indonesian codified accounting standards issued in 2007.
However, it was not until 23 December 2008 that the IAI publicly made a formal statement
that Indonesian accounting standards would fully converge with IFRS, with an expected
completion date of 1 January 2012 (Deloitte Touche Tohmatsu, 2009). This marked the
beginning of a period of transition to IFRS, a process that is still progressing in 2016.

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The move towards full convergence of IFRS in Indonesia has marked a major shift in the
development of accounting standards in the country. While previously the development of
Indonesian accounting standards was strongly influenced by IAS and US GAAP, currently
IFRS and their interpretations are the only major influences on standard-setting in Indonesia.
In this convergence period, the ultimate goal of achieving full convergence of Indonesian
national standards with IFRS has directed the sequence of events in the Indonesian accounting
standard-setting agenda. Accordingly, Indonesian accounting standards has moved
significantly closer to IFRS than in the previous period.

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The decision to change the objective of the standard setting agenda into full convergence with

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IFRS may have been prompted by both economic incentives and political pressure. The
economic incentives for the decision, in particular, come from the globalisation of the

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Indonesian economy. For example, in the capital market sector foreign investors maintain a
significant presence in the market, owning around 64 per cent of the shares traded in the

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Indonesia Stock Exchange as of December 2015.3 Based on Indonesian capital market
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regulations, foreign investors are permitted to hold up to 100 per cent of shares of companies
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listed on the stock exchange, with an exception only for the ownership of listed commercial
banks which is limited to 99 per cent of total shares. Foreign investors also play important role
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in the Indonesian economy through direct investment, where the amount of foreign direct
investment (FDI) inflow to the country increased by almost 100 per cent between 2005 and
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2015 (World Bank, 2016). From the perspective of a developing country that requires foreign
investments to support the growth of its national economy, the use of internationally acceptable
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accounting standards is essential in convincing foreign investors and the international business
community of the quality of financial reporting practices in Indonesia.
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Meanwhile, the political pressure for supporting IFRS convergence is likely to come from the
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supranational institutions of which Indonesia is a member. For instance, the IAI is a full
member of the International Federation of Accountants (IFAC), which means it should conform
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to IFAC’s statements of membership obligations with regard to incorporating IFRS into

national accounting standards. Furthermore, the position of Indonesia as a member of G20
facilitates the full convergence of IFRS in the country. The adoption of IFRS is a commitment

3
Based on data published by the Indonesian Central Securities Depository (Kustodian Sentral Efek Indonesia—
KSEI).

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of the member countries of G20, so Indonesia has an obligation to ensure the convergence of
its national standards with IFRS. The IAI (2012, pp.9, 11) also indicates that the current
Indonesian IFRS convergence programme is a response to the agreement between G20
members.

<Insert Figure 1 about here>

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5.0 The Transition to IFRS in Indonesia

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Our discussion in the previous section highlights that the present accounting standard
development agenda in Indonesia are aimed at achieving full convergence with IFRS. Using

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the teleological process theory we now examine how the Indonesian IFRS convergence
programme is progressing during the IFRS convergence period between 2007 and 2016.

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Specifically, we examine the sequence of changes in the structure and content of the Indonesian
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accounting standards that represent the move towards full convergence with IFRS.
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There are five different convergence approaches a country can choose in adopting IFRS,
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namely: 1) full adoption of IFRS; 2) selective adoption of IFRS or adoption with a time lag; 3)
IFRS adoption with modification to account for country-specific characteristics; 4)
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preservation of national accounting standards but in harmony with IFRS; and 5) continuation
of national accounting standards (Chand and Patel, 2011, p.15). Of these five approaches, IFRS
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convergence in Indonesia follows a combination of the second and third approaches. That is,
Indonesia adopts IFRS gradually into local accounting standards and minor modifications are
made to align the adopted standards with Indonesian regulations and the business environment.
E
CC

The gradual approach of IFRS convergence has led to several phases in the IFRS convergence
programme, each of which has a set of objectives that guide the progression of the convergence
A

process. The first phase covers the period between 2007 and 2012. The main goal of this phase
was to gradually merge IFRS with Indonesian accounting standards. The Indonesian codified
accounting standards published as of 1 September 2007 reflect the beginning of this phase, in
which a number of PSAKs in the pronouncement signified full adoption of IFRS/IAS. For
example, IAS 16 Property Plant and Equipment, IAS 32 Financial Instruments: Presentation,
and IAS 39 Financial Instruments: Recognition and Measurement were among the first

Page 13 of 29
standards to be fully adopted in Indonesia, which soon gained wide attention from the public.
IAS 16, which was adopted as PSAK 16 Fixed Assets, has brought about major changes in
accounting practice because it allows companies to choose either the cost model or the
revaluation model in the valuation of property, plant and equipment. Similarly, IAS 32 and IAS
39, which were adopted as PSAK 50 Financial Instruments: Presentation and Disclosure and
PSAK 55 Financial Instruments: Recognition and Measurement respectively, also sparked
controversy, particularly in the financial industry, due to their complexity.

T
Between 1 January 2008 and 1 January 2012, the DSAK endorsed 35 PSAKs adopted from

IP
IFRS, along with 20 interpretations of financial accounting standards. Specifically, there is one

R
PSAK with an effective date of 1 January 2009, 16 PSAKs that became effective on 1 January
2011, and 18 PSAKs that were implemented on 1 January 2012. In general, Indonesian

SC
accounting standards in 2012 were equivalent to IFRS as at 1 January 2009 (IAI, 2012),
although two standards, i.e. IAS 41 Agriculture and IFRS 1 First-time Adoption of

U
International Financial Reporting Standards, had yet to be adopted. As already noted, there
N
are a number of minor modifications in the adoption of IFRS as PSAKs. For example, in PSAK
A
1 Presentation of Financial Statements, adopted from IAS 1 Presentation of Financial
Statements, the DSAK provides additional explanations of the definition of financial
M

accounting standards to bring it in line with capital market regulations (IAI, 2012).
ED

The completion of the first phase of the IFRS convergence process was marked by the
publication of the codified Indonesian accounting standards as of 1 June 2012. As not all IFRS
PT

were adopted in the first phase, it is clear that full convergence remained the ultimate goal of
the standard-setting process in subsequent phases. Although full convergence had not been
achieved at that time, Indonesian accounting standards had clearly moved towards IFRS,
E

consistent with the final objective of the standard-setting agenda.

CC

After completing the first phase, the DSAK started the second phase of IFRS convergence
A

programme that covers the period between 2012 and 2015. The main aim of this phase was to
reduce the differences between Indonesian accounting standards as of 1 June 2012 and IFRS.
During this period, the DSAK amended nine IFRS-equivalent-PSAKs, replaced one IFRS-
equivalent-PSAK, issued four newly adopted IFRS-equivalent standards, and adjusted the rest
of the standards to align with IFRS as in 2014. The progress of the second phase of the IFRS
convergence was marked by the publication of the codified Indonesian accounting standards

Page 14 of 29
as of 1 January 2015. This pronouncement consists of 42 statements of accounting standards,
of which 38 standards are adopted from IFRS and four standards are self-developed by the
DSAK.

With this pronouncement, the Indonesian accounting standards in January 2015 became
equivalent to IFRS as at 1 January 2014 (IAI, 2014).4 This progress means that the gap between
Indonesian accounting standards and IFRS has been narrowed from three years in the first
phase to one year in the second phase. During the second phase of IFRS convergence, neither

T
IFRS 1 nor IAS 41 had been adopted. These standards, along with other IFRS standards issued

IP
or revised after 1 January 2014 such as IFRS 15 Revenue from Contracts with Customers will

R
be addressed in the ensuing phases of the Indonesian IFRS convergence programme.5 As
Indonesia is yet to make a decision regarding the deadline for full convergence with IFRS, the

SC
current focus of the standard-setting agenda is maintaining the one-year gap between the
Indonesian accounting standards and IFRS. A summary of the pathway of IFRS convergence
in Indonesia is provided in Figure 2.
U
N
A
<Insert Figure 2 about here>
M

6.0 Challenges and Issues in IFRS Convergence

ED

Within the framework of teleological process theory, process is assessed based on the direction
PT

of change: that is, whether change and development move towards an end state. As teleological
theory assumes that there are no prefigured rules or specific stages to be followed by the process
of change, the main emphasis in evaluating process is “…the prerequisite for attaining the goal
E

or end state: the functions that must be fulfilled, the accomplishments that must be achieved,
CC

or the components that must be built or obtained for the end state to be realised” (Van de Ven
and Poole, 1995, p.516). In the context of IFRS convergence in Indonesia, the success of the
A

first and second phases of the convergence programme, coupled with strong support from
regulators and various government bodies, to some extent demonstrated fulfilment of the

4
A detailed comparison between Indonesian accounting standards and IFRS is provided in IFRS and Indonesian
GAAP (PSAK): Similarities and Differences issued by PricewaterhouseCoopers (2014).

5
IAS 41 has subsequently been adopted into the Indonesian accounting standards in December 2015.

Page 15 of 29
preconditions for full convergence. Nonetheless, as the transition to IFRS brought significant
changes in the structure of Indonesian accounting standards, major adjustments to accounting
practice, and extensive revisions of accounting-related regulations, the process of IFRS
convergence undoubtedly faced a number of issues and challenges.

A review of prior literature such as Larson and Street (2004), Tyrrall et al. (2007), Ding and
Su (2008), Hassan et al. (2014), and Bierstaker et al. (2016) provides insights into the extent
of problems in the convergence of IFRS in different countries. Larson and Street (2004), for

T
instance, after examining convergence efforts in 17 European countries, suggest that the

IP
perceived impediments to IFRS convergence include the complicated nature of certain IFRS,

R
insufficient guidance on the first-time application of the standards, the tax-driven nature of
national accounting systems, the applicability of IFRS for SMEs, translation of IFRS, and

SC
limited national capital markets. Similarly, Tyrrall et al. (2007) also report several issues
perceived to be obstacles in the implementation of IFRS in Kazakhstan, including the discerned

U
gap in IFRS, the need to exert judgements in applying IFRS, translating IFRS into local
N
language, and costs imposed by the application of a new set of standards. In a recent study of
A
IFRS application by US financial statement preparers, Bierstaker et al. (2016) highlight the
need for extensive training and education on IFRS, particularly for accountants who are
M

accustomed to applying rules-based accounting standards.

ED

Based on an examination of the response of industries and regulators in the early

implementation of the Indonesian equivalent of IFRS (see Bisnis Indonesia, 2009; World Bank,
PT

2011), the progress of convergence between Indonesian accounting standards and IFRS, and
the experience of other countries (e.g. Larson and Street, 2004; Tyrrall et al., 2007; Ding and
Su, 2008; Hassan et al., 2014; Bierstaker et al., 2016), this study identifies four main issues that
E

constitute impediments to IFRS convergence programmes in Indonesia. These include: the

CC

perceived complexity of certain accounting standards, the judgement and interpretation of

accounting standards, issues in training and education, and residual differences between IFRS
A

and Indonesian accounting standards. Highlighting these issues is crucial, because the
accomplishment of the subsequent phases of IFRS convergence and the attainment of the final
objective of the accounting standard development programmes may depend on how well the
standard setters and accounting regulators deal with the aforementioned issues.

Page 16 of 29
6.1 Perceived Complexity of Certain Accounting Standards
The IFRS have been viewed as accounting standards that promote the extensive use of fair
value accounting (see Cairns, 2006). The main basis for accounting standards development in
Indonesia prior to IFRS convergence was historical cost accounting, thus the move towards
IFRS raised several issues in the implementation of fair-value-based accounting standards. This
has led to a perception that certain new standards adopted from the IFRS are too complex,
hence careful consideration is needed when implementing these standards.

T
The introduction of new accounting standards for financial instruments is a particular example

IP
of how the IFRS have been perceived in Indonesia as being too complicated. In the Indonesian

R
set of accounting standards, accounting for financial instruments is regulated by PSAK 50
Financial Instruments: Presentation (equivalent to IAS 32) and PSAK 55 Financial

SC
Instruments: Recognition and Measurement (equivalent to IAS 39), with both first being
revised in 2006 to align with IFRS. The main differences between these new standards and the

U
older versions relate to the new classification of financial instruments, the use of fair value in
N
the recognition of financial assets and liabilities, and the methods for recognition of financial
A
assets impairment. The banking industry has been considered the sector in which the
implementation of the revised PSAK 50 and 55 is problematic (Infobank News, 2010; World
M

Bank, 2011). The issues that are considered complicated for banks include: the requirement to
implement an incurred loss method for determining loan loss provisions, the use of the effective
ED

interest rate method in the valuation of certain financial instruments, and accounting for
derivatives (Pricewaterhousecoopers, 2006).
PT

Both the revised PSAK 50 and PSAK 55 were initially set to be effective as of 1 January 2009.
However, due to the perceived complexity of the standards, the Indonesian commercial banks
E

association applied for the postponement of these standards because Indonesian banks were
CC

not equipped with the necessary resources. Responding to this appeal, the IAI postponed the
effective date of these standards to 1 January 2010 to provide sufficient time for companies to
A

make internal preparation for the implementation of the standards (Bisnis Indonesia, 2009;
World Bank, 2011). A further extension to 1 January 2012 was granted by the banking industry
regulator in the application of a specific requirement in PSAK 55, which related to the method
of determining loan loss provisions. This was considered necessary as banks were experiencing
difficulty in preparing the historical data of debtors that were required for the calculation of
loan loss provisions methods under IAS 39.

Page 17 of 29
6.2 Judgement in Implementing IFRS
It has been shown that the implementation of IFRS involves judgement and the interpretation
of the standards (e.g. Chand et al., 2010; Heidhues and Patel, 2012). It is therefore not
surprising that apart from the challenges in the comprehension of these new standards, there is
also an issue concerning judgement and interpretation in the application of IFRS in the
Indonesian accounting environment.

Accounting for land is one example of where accountants’ judgement is necessary in

T
implementing IFRS in the Indonesian context. According to Indonesian property laws,

IP
ownership of land can only be granted to Indonesian citizens, state-owned banks, farming

R
cooperatives, and social and religious organisations. Thus, companies that are not eligible for
land ownership acquire property under land rights, which can grant the right to build, the right

SC
to cultivate, and the right to use. The adoption of IFRS related to this issue has sparked different
interpretations among Indonesian accountants about the appropriate accounting treatment (see

U
DSAK, 2011). One interpretation maintains that the proper accounting method for land rights
N
is in accordance with PSAK 16 Fixed Assets (equivalent to IAS 16) in which the initial cost
A
incurred in land rights is recognised as an item of property, plant, and equipment, and is not
depreciated. The second interpretation maintains that land rights are interpreted under
M

accounting for leases in which the initial recognised cost is subject to amortisation. Another
interpretation maintains that the purchase of land should be treated as a purchase of an
ED

indefinite intangible asset, and is not subject to amortisation. The DSAK responded to this issue
by publishing an interpretation of accounting standards that maintains that land rights should
PT

be reported under property, plant, and equipment. As such, the value of land rights should not
be amortised unless land rights holders are unable to extend the rights.
E

A similar issue also arises in respect of telecommunication towers. The telecommunication

CC

industry in Indonesia is growing rapidly, and the number of telecommunication towers has
increased steadily in recent years. The government responded to this trend by enacting
A

regulations on the development and use of telecommunication towers that requires, among
other things, the joint use of a tower between telecommunication provider companies. The
shared use of a telecommunication tower raises the question of appropriate accounting
treatment, particularly with respect to how telecommunication towers are recognised and
reported in the financial statements of a tower provider company. There are two different
interpretations in the telecommunication industry regarding this matter (DSAK, 2012). First,

Page 18 of 29
telecommunication towers should be recognised as part of property, plant, and equipment, and
should follow the requirement of PSAK 16 Fixed Assets (equivalent to IAS 16). Second, towers
can alternatively be treated as investment properties under PSAK 13 Investment Property
(equivalent to IAS 40). The two accounting treatments require different measurement bases
that can lead to different profit or loss figures being reported in the financial statements, which
in turn affects the comparability of financial statements in the telecommunication industry
(DSAK, 2012).

T
It has been argued that the issue of accounting for the telecommunication industry stems from

IP
a lack of clear definition of ‘property’ in both IAS 16 and IAS 40 (DSAK, 2012). Therefore,

R
the DSAK has brought this issue to the IASB Emerging Economies Group Meeting. In
response, the IASB has addressed the issue of accounting for telecommunication towers in the

SC
IFRS Interpretation Committee Meeting, in which a set of criteria have been proposed to
recognise the case of telecommunication towers (IASB, 2012).

U
N
6.3 Issues in Training and Education
A
The aforementioned issues and challenges highlight the need for Indonesian accountants to be
familiar with IFRS and to exercise careful interpretation in implementing the new IFRS-
M

adopted standards, which in turn raises the need for systematic education programmes to
familiarise preparers, auditors, and users of financial statements with the new accounting
ED

standards. This necessity has been identified by professional accountant bodies such as the IAI
and the IAPI, and a number of continuing professional education programmes, workshops, and
PT

seminars have been organised to increase accountants’ aptitude for implementing the
Indonesian equivalent of IFRS. A number of initiatives have also been instigated by the
Division of Academic Accountants of the IAI to ensure that the curricula of accounting
E

education programs in Indonesian universities cover the updated progress of Indonesian IFRS
CC

convergence.
A

In spite of the implementation of IFRS-related training and education in the Indonesian

accounting professional and education environment, several issues still demand consideration.
For example, a learning curve in the early familiarisation period is inevitable because it is not
possible for financial statement preparers and auditors to fully comprehend the standards in the
first year of the implementation phase. Similarly, introducing new IFRS-based accounting
concepts into the accounting curriculum may also take time, as sufficient arrangements need

Page 19 of 29
to be made (Larson and Brady, 2009; Patro and Gupta, 2012). Lastly, as is asserted by Perera
and Baydoun (2007), the shift of the national accounting system from the former Dutch model
to the Anglo-Saxon model has led to the case of ‘split personality’ in the Indonesian accounting
environment. Hence, one of the challenges of IFRS education programmes in Indonesia is to
contribute to the development of an accounting environment that enables the best-possible
implementation of IFRS.

6.4 Remaining Differences between IFRS and Indonesian GAAP

T
When the IAI formalised its commitment in 2008 to move towards full convergence between

IP
Indonesian accounting standards and IFRS, the deadline set was 2012. Nevertheless, even as

R
of 1 January 2015 Indonesian accounting standards did not reflect all the most recent IFRS.
There are at least three reasons why this was the case: gradual and selective adoption with

SC
modification in the convergence process; the fast pace of IFRS developments; and the
translation issue.

U
N
Given the gradual and selective approach to IFRS convergence adopted in Indonesia, it was
A
inevitable that there would be a delay in the adoption of recent standards issued by the IASB,
leading to a gap between Indonesian national standards and IFRS. Moreover, IFRS
M

convergence in Indonesia never aimed to produce a direct word-to-word translation of IFRS.

Instead, the Indonesian accounting standards board preferred selective IFRS adoption with
ED

minor modifications to make the standards consistent with the Indonesian business and legal
environment. As a result, there are a number of differences between certain Indonesian
PT

accounting standards and their respective IFRS equivalent standards, although the differences
are not considered substantial. An example of the differences between the two sets of standards
resulting from consideration of the business environment is the presentation of consolidated
E

and separate financial statements. Under Indonesian accounting standards, this issue is
CC

regulated under PSAK 4 Consolidated and Separate Financial Statements, adopted from IAS
27. Unlike IAS 27, PSAK 4 does not provide exemption for parent companies to present
A

consolidated financial statements because exemption is not consistent with Indonesian

regulations.

The continuing revision of IFRS and the publication of new accounting standards has also
resulted in the Indonesian equivalents of IFRS failing to reflect subsequent amendments to
IFRS. The Indonesian accounting standards as of 1 January 2015 were adopted from IFRS as

Page 20 of 29
of 2014, hence certain issues in IFRS that were revised after 2014 were not addressed in this
pronouncement. The time gap in the Indonesian IFRS adoption programme is related to
standard-setting processes that require the DSAK to follow certain phases in proposing and
implementing new standards (World Bank, 2011).

The time lag between the pronouncement of IFRS and the implementation of Indonesian IFRS-
equivalent standards may also stem from translation issues (see World Bank, 2011). Original
IFRS are published in English, so IFRS convergence in Indonesia involves translation of the

T
standards into Bahasa Indonesia. Studies have shown that when IFRS are adopted in non-

IP
English speaking countries, translating the IFRS from English to the local language can delay

R
the convergence process (e.g. Larson and Street, 2004). Furthermore, there is the risk of
inaccurate translation, which leads to inconsistency between the IFRS and their local language

SC
equivalents (Hellmann et al., 2010; Baskerville and Evans, 2011; Dahlgren and Nilsson, 2012).

7.0 Conclusions and Implications

U
N
A
This study analyses the dynamics in the Indonesian accounting standard-setting process. We
have explored the origins of modern Indonesian accounting standards and traced the
M

development of these standards within three defined periods: the early stage of accounting
standard development (1973-1990), the advancement period (1990-2007), and the IFRS
ED

convergence period (2007-2016). We also examine the process of convergence between

Indonesian accounting standards and IFRS, and highlight the challenges than may constitute
PT

impediments to this process.

Using teleological process theory as a theoretical lens, this study finds that changes in
E

Indonesian accounting standards have been substantially driven and directed by the objectives
CC

of the standard-setting programmes, and these objectives changed over time. In the initial stage
of accounting standard development, the key objective of standard-setting at that time was to
A

establish a modern set of accounting standards that could serve as a catalyst for growth of the
capital market sector. This objective substantially changed the country’s standard-setting
orientation from the Dutch colonisation system to the Anglo-American model. During the
second period, the main focus of the standard-setting initiatives was the enhancement of the
Indonesian accounting regulatory framework. This led to a shift in the standard-setting base
from US GAAP to IAS. Meanwhile, in the third period, the main goal of standard setting had

Page 21 of 29
changed into achieving full convergence of Indonesian accounting standards with IFRS. This
goal has guided the sequence of events in the standard-setting programmes ever since.

An examination of the sequence of changes in Indonesian accounting standards during the

transition to IFRS reveals that Indonesia has implemented a gradual approach to IFRS
convergence, in which IFRS are adopted in several phases with minor modifications. In the
first phase of convergence that was completed in June 2012, Indonesia was able to adopt the
majority of IFRS as of 2009, resulting in a three-year gap between the Indonesian standards

T
and IFRS. In the second phase that was completed in early 2015, this gap was minimised to

IP
one year. As there are several IFRS that have not been adopted in the first and second phases,

R
it is clear that the goal of full convergence remain an issue to be addressed in the subsequent
convergence phases.

SC
The success of the Indonesian IFRS convergence programme will be substantially determined

U
by how well the country’s standard setters cope with the issues that have emerged during the
N
transition period. The Indonesian experience with certain newly-adopted IFRS has shown that
A
the readiness of industry to implement a new set accounting standards may affect the pace of
the convergence programme. The ability of professional accountants to exert judgements in the
M

implementation of IFRS is also crucial to achieving the consistent application of these

standards in the Indonesian context. These issues have necessitated IFRS education
ED

programmes that can familiarise professional accountants with the newly-adopted accounting
standards. As Indonesia strives to eliminate the remaining inconsistencies between its national
PT

accounting standards and IFRS, issues such as the extent of modification made to the adopted
standards, the fast pace of change within IFRS, and the issue of translation from English to the
national language deserve special consideration from the standard setters.
E
CC

Our study has several important implications. It fills a gap in the literature by further examining
the gradual process of IFRS adoption in a developing country. An examination of the process
A

of convergence in developing countries such as Indonesia provides better understanding of the

relevance of IFRS and the progression of convergence programmes in countries that once were
considered less well-suited to the application of IFRS. Further, this study highlights the issues
and challenges that need to be addressed to achieve full convergence when IFRS are adopted
progressively with modifications in a non-English speaking country. Lastly, the findings of this
study are likely to be of significance to accounting standard setters in other countries or regions,

Page 22 of 29
particularly those that are developing, to assist in determining and evaluating the pathway of
change as they move towards IFRS.

Whilst the analysis presented in this study provides insights into the process of accounting
convergence in Indonesia, the study does not examine how IFRS are interpreted and applied
by professional accountants in that country. Future studies could empirically investigate the
effects of cultural, individual, and other environmental characteristics on the application of
IFRS in developing countries, and examine how the application of these standards by

T
professional accountants in these economies might differ from their application in developed

IP
countries. Such studies are important in understanding whether the widespread acceptance of

R
IFRS is followed by consistent application of the standards across countries.

SC
U
N
A
M
ED
E PT
CC
A

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Zehri, F., & Chouaibi, J. (2013). Adoption determinants of the International Accounting
Standards IAS/IFRS by the developing countries. Journal of Economics, Finance and
Administrative Science, 18(35), 56-62.

T
Figure 1. Development of Accounting Standards in Indonesia

R IP
Early period Advancement period Convergence period
(1973-1990) (1990-2007) (2007-2016)

SC
Objective: Objective: Objective:
To support the capital market
reactivation programme
To enhance the quality of
Indonesian accounting
U Full convergence with IFRS
N
standards

Major milestones: Major milestones: Major milestones:

A
 A change in standard  A change in standard setting  A shift in standard setting
setting orientation from a orientation from US GAAP orientation towards IFRS
M

Dutch system to an Anglo- to IAS  Gradual adoption of IFRS

American model  Commitment to support into Indonesian national
 1973, publication of the harmonisation of accounting standards
ED

Indonesian Accounting international accounting

Principles (PAI) (based on standards
US GAAP)  1994, reorganisation of the
 1974, establishment of the KPAI into the KSAK
PT

KPAI as a permanent  1994, publication of the

standard setting body Indonesian Financial
within the IAI Accounting Standards
 1984, publication of the
E

(SAK)
revised PAI (based on US  1998, restructuration of the
CC

GAAP) KSAK into DSAK

A

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Figure 2. Pathway of IFRS Convergence in Indonesia

June 2012 January 2015

First phase Second phase
2007 2016 ?

Full
 The DSAK endorsed 35  The DSAK amended nine  Adopting the convergence
PSAKs adopted from IFRS-equivalent-PSAKs, remaining IFRS

T
IFRS replaced one IFRS- (e.g., IAS 41 was
 Indonesian standards in equivalent-PSAK, issued adopted in

IP
June 2012 were four newly adopted IFRS- December 2015)
equivalent to IFRS as in equivalent standards, and  Focus on
2009 (a three-year gap) adjusted the rest of the maintaining the

R
 IAS 41 and IFRS 1 had standards one-year gap
not been adopted  Indonesian standards in between

SC
January 2015 were Indonesian
equivalent to IFRS as in standards and
2014 (a one-year gap) IFRS
 IAS 41 IFRS 1, IFRS 14,
and IFRS 15 had not been
adopted
U
N
A
M
ED
E PT
CC
A

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