|Extent of IFRS application||Status||Additional Information|
|IFRS Accounting Standards are required for domestic public companies||Indonesia has not adopted IFRS Standards for reporting by domestic companies. Indonesia has been converging its national standards toward IFRS Standards, but without a plan for full adoption of IFRS Standards.|
|IFRS Accounting Standards are permitted but not required for domestic public companies|
|IFRS Accounting Standards are required or permitted for listings by foreign companies||No. All foreign companies whose securities trade in a public market are required to use Indonesian national accounting standards.|
|The IFRS for SMEs Accounting Standard is required or permitted||No.|
|The IFRS for SMEs Accounting Standard is under consideration||No.|
Profile last updated: 28 March 2017
The DSAK IAI as part of The Indonesian Institute of Accountants (Ikatan Akuntan Indonesia – IAI) is the independent national accounting standard‐setting body in Indonesia. It is tasked by the IAI National Council to establish the Indonesian Financial Accounting Standards (Standar Akuntansi Keuangan – SAK).
SAK as issued by the DSAK IAI is recognised by the Government of the Republic of Indonesia through, among other things, the Indonesian Law No. 40/2007 on Limited Liability Company and Law No. 8/1995 on Capital Market.
Indonesia’s commitment is to support IFRS Standards as the globally accepted accounting standard and to continue with the IFRS Standards convergence process, further minimising the gap between SAK and IFRS. Indonesia is yet to announce its plan for the full adoption of IFRS Standards in Indonesia.
The decision to elect the convergence approach instead of full adoption was based on the consideration of the potential interpretation and implementation issues.
Since making the public commitment to support IFRS Standards in 8 December 2008, the DSAK IAI has been converging the SAK towards IFRS Standards. As a result of the first phase of the IFRS convergence process, SAK as at 1 January 2012 is substantially in line with IFRS Standards as at 1 January 2009, but there are a number of differences and several IFRS Standards and IFRIC Interpretations do not have SAK equivalents.
The DSAK IAI is currently progressing with the second phase of the IFRS convergence process. The objective of this phase is to further minimise the gap between SAK and IFRS Standards, from three years to one year. This would take SAK as at 1 January 2015 to be substantially in line with IFRS Standards as at 1 January 2014, again with some exceptions.
Currently there are two tiers of GAAP that are established in Indonesia:
The DSAK IAI also issued PSAK 45 as part of the SAK for not‐for-profit entities. The Board is currently deliberating on whether a more robust set of standards is necessary to meet the reporting requirements of not‐for‐profit entities Indonesia.
2016 Joint Statement
On 25 May 2016, the Trustees of the IFRS® Foundation, the Indonesia Financial Services Authority (OJK) and the Institute of Indonesia Chartered Accountants (IAI) announced their intention to deepen cooperation as Indonesia develops its plans to achieve full convergence with IFRS Standards. The plans were set out in a Joint Statement.
Indonesia’s commitment is to support IFRS Standards as the globally accepted accounting standard and to continue with the IFRS convergence process, further minimising the gap between SAK and IFRS Standards. Indonesia is yet to announce its plan for the full adoption of IFRS Standards in Indonesia.
Any plan to permit or require the use of IFRS Standards for domestic companies whose securities trade in public market will depend on the progress of the convergence process, and the commitment of both the standard setter and relevant regulators.
Based on the mandate that has been given by the IAI National Council, the due process procedure for the DSAK IAI in converging the SAK with IFRS Standards is as follows: