2012 IFRS Convergence Program in Indonesia

Rosita Uli Sinaga

Chairman of The Indonesian Financial Accounting Standards Board (DSAK-IAI) The Indonesian Institute of Accountants
IIA Congress 8th -10th December 2010

What is IFRS?

IASB Governance Structure

IFRS Advisory Council

IFRIC

The Target of 2012 IFRS Convergence in Indonesia

o Revising PSAK to reach material compliance with IFRS as of 1 January 2009, which will be effective at year 2011/2012. o We use gradual approach rather than Big Bang approach

Indonesia IFRS Convergence Roadmap

Adoption Stage (2008-2010) Adopting all IFRS to PSAK Preparation for necessary infrastructure Evaluation and managing the adoption impact to SAK Final Preparation Stage (2011) Partial application of the standard Finishing the standard preparation or necessary infrastructure Implementation Stage (2012) The application of the standard Evaluation of IFRS adoption impact to the business environment Define strategy for full adoption

How We do it in Indonesia
o Gradual approach not big bang approach o Establish IFRS implementation team to support DSAK on implementation challenges o Support from Ministry of SOE by establishing IFRS task force team to assist SOE in implementing IFRS o Improve the cooperation with industry associations o Support from the accountant academics in disseminating convergence updates through out Indonesia and research on IFRS implementation issues.

New Standards and Interpretations

Effective on 2010 3 new Accounting Standards (PSAK) Withdrawal of 9 Accounting Standards Withdrawal of 1 Interpretation Please see the appendix for more details Effective on 2011 16 New Accounting Standards (PSAK) 7 New Interpretations (ISAK) Effective on 2012 (estimated) 11 New Accounting Standards (PSAK) 5 Interpretations (ISAK)

The Progress of IFRS Adoption in Indonesia

40 35 30 25 20 15 10 5 0 01-Jan-07 01-Jan-08 2 9 10 23 37 37 37 37 33

90%
37

01-Jan-09

01-Jan-10

01-Jan-11

12/14/2010

IFRS Adopted

Total IFRS

Estimated

IFRSs which Are Still Under Discussion for Adoption in 2012

o IFRS 1: First Time Adoption o IFRS 4 : Insurance Contract o IFRS 6 : Exploration and Evaluation Mineral

Resources

o IAS 41 : Agriculture The Board is observing the current development of IASB for those standards.

NON COMPARABLE PSAK

No 1 2 3 4 PSAK 44 Aktivitas Pengembangan Real Estate (Real Estate Activity) 5 6 7 8 PSAK 51 Kuasi Reorganisasi (Quasi) PSAK 45 Akuntansi Entitas Nirlaba (Non Profit Accounting) PSAK PSAK 21 Ekuitas (Equity) PSAK 27 Akuntansi Koperasi (Accounting for Cooperatives) PSAK 38 Restrukturisasi Ekuitas Sepengendali (Common Control Restructuring) DSAK Position as of 1 Dec 2010 Will be Revoked Will be Revoked Not Decided Will be Revoked, Replaced by IFRIC 15 (ISAK 21) Not decided Revised

Not decided PSAK 47 Akuntansi Tanah (Accounting for Land PSAK 39 Akuntansi Kerja Sama Operasi (Accounting for Not decided Operational Cooperation)

The Accounting Standard Framework in Indonesia

2010-2012
SAK UMUM
IFRS based PSAK Shariah Standards PSAK Non IFRS (including SAK for Non Profit)

11

> 2012
SAK UMUM
IFRS based PSAK PSAK NON IFRS (Including syariah)

SAK ETAP (PSAK for SME) SAK for Non profit

SAK-ETAP (PSAK for SME)

IFRS Active projects 2010

IFRS Conceptual framework (8 phases) Consolidation, including SPE (to replace IAS 27) Derecognition (new IFRS) Amendments to IFRS 5 Emissions trading schemes (new IFRS) Fair value measurement guidance IFRS 9 (phase 2&3) Financial statement presentation (to replace IAS 1 & 7) Amendments to IAS 12 Insurance contract (phase 2) Amendments to IAS 31 (Joint ventures) Amendments to IAS 17 Amendments to IAS 37 (Provisions) Amendments to IAS 19 Amendments to IAS 18 Target issuance From Q2 2010 to undetermined yet Q4 2010 Q4 2010 Q2 2010 Q2 2011 Q3 2010 Q4 2010 Q2 2011 Q2 2011 Q2 2011 Q2 2010 Q2 2011 Q4 2010 Q2 2010 Q2 2011

The gap 1 January 2012

IFRS

PSAK

1 Jan 2009

2010

2011

2012

The gap after 1 January 2012 (an illustration only)

IFRS

PSAK

1 Jan 2009

2010

2011

2012

2013

????????

Accountant Perception on the IFRS Convergence in Indonesia*

Strongly Positive 6% Strongly Negative 1% Negative 21%

Positive 72%

*Research by Ersa Tri Wahyuni and Penny Lay, 2010, to the 143 accountant respondents in Jakarta. 53% works in accounting firm and 47% works in companies.
15

Survey to Bankers on the Implementation of Financial Instruments Standards

Response Total Response Does the key management support the Yes 56 implementation of IAS 32 and IAS 39? 96.43% Does the implementation of the standards Yes 54 result the change in the banks information 92.6% system? Does the implementation of the standards Yes 49 provide more relevant information about 89.8% banks financial performance?
Total Respondent is 56 bankers, survey was collected during the Central Banks Seminar, 24th November 2010
16

Questions

17

Challenges of IFRS Convergence

o The convergence process of relevant laws and regulations (BAPEPAM, Central Bank, Tax, etc) o Dissemination of IFRS Convergence information to all stakeholders through out Indonesia o IFRS is moving target o Readiness of other infrastructure (other specialists, lecturers, accounting syllabi and text books, auditing standards) o The mind set shift from rule based to principle based among all players (preparers, auditors and regulators)

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Plans for The Future

o More involvement in the international forum
n AOSSG (Asian Oceania Standard Setter Group)
o Involve in 6 working groups: Revenue, Leases, Consolidation, Insurance Contract, Islamic Finance and Agriculture.

n IAI is the Host of The 5th IFRS Regional Policy Forum

o 23-24 May 2011 in Bali

n Intensive communication with IASB.

o Meetings with IASB representative (May and Oct 2010)

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Plans for The Future

o Financial Reporting Act is necessary to provide legal support of the Accounting Standards o Strategy for IFRS Convergence Wave II

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Thank You
Disclaimer: The views expressed in this presentation are those of the presenter. Official position of the DSAK-IAI on accounting matters are determined only after extensive due process and deliberation. The Indonesian Financial Accounting Standards Board (DSAK-IAI) GRHA AKUNTAN Jl. Sindanglaya No.1 Menteng, Jakarta Pusat Telp. 021 31904232 Fax. 021 7245078 Email: Website: :

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Appendix: List of the Accounting Standards and Interpretation with their effective date

22

No 1. 2. 3. 4. 5. 6. 7. 8.

PSAK/ISAK PSAK 13 Properti Investasi PSAK 16 Aset Tetap PSAK 30 Sewa PSAK 14 Persediaan PSAK 26 Biaya Pinjaman PSAK 50 Instrumen Keuangan: Penyajian dan Pengungkapan PSAK 55 Instrumen Keuangan: Pengakuan dan Pengukuran ISAK 8 Penentuan Apakah Suatu Perjanjian Mengandung Suatu Sewa dan Pembahasan Lebih Lanjut Ketentuan Transisi

Ref IAS 40 IAS 16 IAS 17 IAS 2 IAS 23 IAS 32 IAS 39 IFRIC 4

Issued 2007 2007 2007 2008 2008 2006 2006 2007

Effective date 1 January 2008 1 January 2008 1 January 2008 1 January 2009 1 January 2010 1 January 2010 1 January 2010 September 2008

No 1. PPSAK No.1

PPSAK Pencabutan PSAK 32: Akuntansi Kehutanan, PSAK 35: Akuntansi Pendapatan Jasa Telekomunikasi PSAK 37: Akuntansi Penyelenggaraan Jalan Tol Pencabutan PSAK 41: Akuntansi Waran PSAK 43: Akuntansi Anjak Piutang Pencabutan PSAK 54: Akuntansi Restrukturisasi Piutang Bermasalah Utang-

Issued

Effective

2009

1 January 2010

2.

PPSAK No. 2

2009

1 January 2010

3.

PPSAK No. 3

2009

1 January 2010

4.

PPSAK No. 4

Pencabutan PSAK 31 (revisi 2000) Akuntansi Perbankan, PSAK 42: Akuntansi Perusahaan Efek, dan PSAK 49: Akuntansi Reksa Dana Pencabutan ISAK 06: Interpretasi Atas Paragraf 12 dan 16 PSAK No. 55 (1999) Tentang Instrumen Derivatif Melekat Pada Kontrak Dalam Mata Uang Asing

2009

1 January 2010

5.

PPSAK No. 5

2009

1 January 2010

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No 1. PSAK 1

PSAK Penyajian Laporan Keuangan

Reference IAS 1 Presentation of Financial Statement IAS 7 Statement of Cash Flow IAS 34 Interim Financial Reporting IAS 27 Consolidated and Separated Financial Statement IFRS 8 Operating Segment IAS 31 Interests in Joint Ventures IAS 24 Related Party Disclosures IAS 28 Investments in Associates

2. 3. 4.

PSAK 2 Laporan Arus Kas PSAK 3 Laporan Keuangan Interim PSAK 4 Laporan Keuangan Konsolidasian dan Laporan Keuangan Tersendiri

5. 6.

PSAK 5 Segmen Operasi PSAK 12 Bagian Partisipasi dalam Ventura Bersama

7. 8.

PSAK 7 Pengungkapan Pihak-Pihak yang Berelasi PSAK 15 Investasi Pada Entitas Asosiasi

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No
9. 10. 11. 12.

PSAK
PSAK 19 Aset Takberwujud PSAK 22 Kombinasi Bisnis PSAK 23 Pendapatan PSAK 25 Kebijakan Akuntansi, Perubahan Estimasi Akuntansi & Kesalahan PSAK 48 Penurunan Nilai Aset PSAK 57 Provisi, Liabilitas Kontijensi & Aset Kontijensi PSAK 58 Aset Tdk Lancar Yg Dimiliki Untuk Dijual & Operasi Yg Dihentikan

Reference
IAS 38 Intangible Assets IFRS 3 Business Combination IAS 18 Revenue IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 36 Impairment of Assets IAS 37 Provisions, Contingent Liabilities IFRS 5 Non-current Assets Held for Sale and Discontinued

13. 14.

15.

16

PSAK 8 Peristiwa Setelah Tanggal Neraca

IAS 10 Event after balance sheet date

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No
1.

ISAK
ISAK 7 Konsolidasi Entitas Bertujuan Khusus ISAK 9 Perubahan atas Liabilitas Purna Operasi, Liabilitas Restorasi & Liabilitas Serupa ISAK 10 Program Loyalitas Pelanggan ISAK 11 Distribusi Aset Non Kas Kepada Pemilik ISAK 12 Pengendalian Bersama Entitas: Kontribusi Nonmoneter oleh Venturer ISAK 14 Aset Takberwujud; Biaya Situs Web ISAK 17 Laporan Keuangan Interim dan Penurunan Nilai

Reference
SIC 12 Consolidation Special Purposes Entities IFRIC 1 Changes in existing decommissioning, restoration and similar liabilities IFRIC 13 Customer Loyalty Programs IFRIC 17 Distributions of Non-cash Assets to Owners SIC 13 Jointly Controlled Entities Non Monetary SIC 32 Intangible Assets Web Site Costs IFRIC 10 Interim Financial Reporting and Impairment

2.

3. 4. 5.

6. 7.

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No 1 2.

PSAK PSAK 10: Pengaruh Perubahan Kurs Valuta Asing PSAK 18 Akuntansi dan Pelaporan Program Manfaat Purnakarya PSAK 24 Imbalan Kerja ED PSAK 34 Akuntansi Kontrak Konstruksi ED PSAK 46 Akuntansi Pajak Penghasilan PSAK 53 Pembayaran Berbasis Saham

Reference IAS 21: The Effect of Changes in Foreign Exchange Rates IAS 26 Accounting an reporting by retirement benefit plans IAS 19 Employee Benefits IAS 11 Construction Contract IAS 12 Income Taxes IFRS 2 Share-based payment

3. 4. 5. 6

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No 7 8.

PSAK PSAK 50 : Instrumen Keuangan: Penyajian KED PSAK 56 (ED akan keluar Des 2010) Laba per saham PSAK 60: Instrumen Keuangan:Pengungkapan PSAK 61: Akuntansi Hibah Pemerintah Dan Pengungkapan Bantuan Pemerintah ED PSAK 63: Pelaporan Keuangan dalam Ekonomi Hiperinflasi

Reference IAS 32: Financial Instruments: Presentation IAS 33 Earnings per share IFRS 7 Financial Instrument : Disclosure IAS 20 Accounting for government grants and disclosure of government assistance IAS 29 Financial Reporting in hyperinflationary economies

9. 10.

11.

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No 1. ISAK 13

ISAK Lindung Nilai Investasi Neto dalam Kegiatan Usaha Luar Negeri

Reference IFRIC 16 Hedges of Net Investment in a Foreign Operation

2. 3.

ISAK 16 Perjanjian Konsesi Jasa ISAK 15 PSAK 24 - Batas Aset Imbalan Pasti, Persyaratan Pendanaan Minimum Dan Interaksinya ISAK 18: Bantuan Pemerintah-Tidak Ada Relasi Specifik dengan Aktivitas Operasi

IFRIC 12 Service Concession Arrangements. IFRIC 14: IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction SIC-10 Government AssistanceNo Specific Relation to Operating Activities

IFRIC 7: Applying the Restatement Approach under ED ISAK 19: Penerapan Pendekatan Penyajian Kembali dalam IAS 29: Financial Reporting in Hyperinflationary PSAK 63: Pelaporan Keuangan dalam Ekonomi economies Hiperinflasi
ED ISAK 20: Pajak Penghasilan-Perubahan dalam Status Pajak Entitas atau Para Pemegang Sahamnya ED ISAK 21: Perjanjian Konstruksi Real Estate SIC-25 Income TaxesChanges in the Tax Status of an Entity or its Shareholders

IFRIC 15: Real Estate Construction Agreement

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Pencabutan Berlaku 1 January 2012

No PPSAK

1.

2 3

ED PPSAK 6: Pencabutan PSAK 21: Akuntansi Ekuitas, ISAK 1: Penentuan Harga Pasar Dividen, ISAK 2: Penyajian Modal dalam Neraca dan Piutang kepada Pemesan Saham, ISAK 3: Akuntansi atas Pemberian Sumbangan atau Bantuan ED PPSAK 7: Pencabutan PSAK 44 Perjanjian Kontruksi Real Estate ED PPSAK 8: Pencabutan PSAK 27: Akuntansi Koperasi