2 Types of Financial Accounting Standards


2 Types of Financial Accounting Standards

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To date, there are five types of financial accounting standards in Indonesia. The five accounting standards are issued by the Indonesian Accounting Association Standards Board or IAK DSAK.

All accounting standards established by DSAK IAI have been applied by entities in Indonesia, both private and state institutions. The following explanation.


The first accounting standard that applies in Indonesia is PSAK-IFRS. PSAK International Financial Report Standard is another name for financial accounting standards or SAK that was practiced by IAI in 2012. PSAK-IFRS is used by a business entity that has a type of public accountability.

So, it can be interpreted that the business entity has been registered or is in the process of registering on the capital market as an issuer. Some examples of business entities that use PSAK-IFRS are insurance, BUMN, banking and pension fund companies.

Basically, PSAK and SAK do not have much difference. Both standards have the same goal, which is to provide the latest information for users of financial statements.

But for IFRS users is determined because Indonesia is included as a member of the International Federation of Accountants or IFAC, where IFRS is the accounting standard. So, Indonesia made PSAK-IFRS as its financial accounting standard.

Besides PSAK-IFRS, there are also SAK-type entities without public insurance called SAK-ETAP. IFRSs used by entities that have public accountability are not significant. The entity’s financial statements are also useful for providing general purposes to external users only.

Similar to the PSAK-IFRS, IAI DSAK is the party that established this SAK-ETAP since 2009. Then, the application of the SAK-ETAP was only realized in 2010 and became effective as of early January 2011.

SAK-ETAP is the result of a simplification of PSAK-IFRS. SAK-ETAP does not record profit or loss statements that are easily understood by its users.

Valuation of intangible assets, fixed assets, and investment property after the acquisition date is also only reported using the acquisition price.

In addition to these simplifications, SAK-ETAP also has no choice of using revaluation or fair value. The recognition of deferred tax liabilities and assets is not reported to SAK-ETAP. This is suspected by the tax burden being recognized a number of taxes based on tax provisions.

If done properly, the application of SAK-ETAP in medium and small business units enables business owners to be able to prepare their own financial statements without the need for help from other parties. Financial reports with SAK-ETAP can also submit audits if needed.


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