The Importance of Understanding PSAK (Statement of Financial Accounting Standards)

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The Importance of Understanding PSAK (Statement of Financial Accounting Standards)

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Accounting is a scientific field that has an important role in various things. In practice, accounting can help a company, organization, investor, and government agency to make decisions in allocating available resources.

In order to provide the required information, an accountant will usually record, summarize, and analyze the financial data that has been collected. After the three things are done, an accountant will make a financial report that is useful for describing the findings. So, it can help the company to make the decisions needed so that the company’s performance can run better.

However, did you know that in making financial statements, an accountant needs to refer to a procedural framework called PSAK?

When a financial statement adheres to PSAK, accountants will find it easier to compare its contents with previous financial statements. That way, the parties concerned will be easier to analyze changes that occur in the company.

Having a function that is quite important, an accountant must understand about PSAK. For that, see the explanation about the following PSAK. So that the financial statements made can be easily compared with reports that have been made previously.

Explanation of PSAK

Statement of Financial Accounting Standards or PSAK is a framework of referral procedures in making financial accounting reports. PSAK contains rules relating to the activities of recording, compiling, conducting, and also presenting a financial statement.

In PSAK there is a collection of principles or principles in presenting financial statements that contain general objectives or commonly referred to as general purpose financial statements. The function of the basic determination in presenting the financial statements is so that the comparison process with the previous financial statements can be done more easily.

Information and data about entities presented by PSAK are assets, liabilities, equity, income and expenses. PSAK also presents entities in the form of contributions from owners and distribution to owners, profits and losses, to cash flow and other information contained in the financial statement notes.

The Statement of Financial Accounting Standards is made and compiled by IAI or the Indonesian Accounting Association. The making of PSAK by the Indonesian Accounting Association is based on the ongoing situation. PSAK has also been approved and approved jointly by official institutes and institutions in Indonesia.

Existing standards in PSAK and are still valid must be followed by accountants in making various things or reports relating to the field of accounting science. So, you could say that this PSAK is a guide that must be followed by workers in accounting in Indonesia.

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