A Practical Guide to

the New and Revised

Indonesian Financial
Standards for 2023
September 2023

www.pwc.com/id
 Table of contents
Introduction ..............................................................................................................................................3
Amended accounting standard ...............................................................................................................4
Amendments to PSAK 16 – Proceeds before Intended Use ...................................................................4
Amendments to PSAK 1, “Presentation of Financial Statements” and PSAK 25 “Accounting Policies,
Changes in Accounting Estimates and Errors” – Disclosure of Accounting Policies and Definition of
Accounting Estimates .............................................................................................................................5
Amendments to PSAK 46 "Income Taxes" – Deferred Tax Related to Assets and Liabilities Arising from
a Single Transaction ...............................................................................................................................6
Buletin Implementasi Vol 1 and 2 ...........................................................................................................7
APPENDIX A—List of issues covered in Buletin Implementasi Vol 1 and 2 ........................................8
APPENDIX B—Forthcoming requirements...........................................................................................12
APPENDIX C—Other Updates ...............................................................................................................13

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 Introduction
Certain Indonesian Financial Accounting Standards (“IFAS”) have been revised and amended and will come into effect in 2023.
This publication is a practical guide to provide an overview of the potential impacts to its process, system, or business and the
specific considerations to be made as part of its understanding and implementation of these changes in the reporting
requirements.

Recent developments in Indonesia have shown the government’s commitment to close the gap between IFRS and PSAK, while
maintaining the local specific accounting standard. There are upcoming updates not only from SAK - Umum but also in other
areas such as Shariah accounting standards and the new SAK International Pillar.

This publication focuses on updates in SAK - Umum. In the following section, it provides some highlights on several amendments
to the standards that will become effective on 1 January 2023. DSAK-IAI has published an amendment to PSAK 16 "Property,
Plant and Equipment" – Proceeds before Intended Use and amendments to PSAK 1, “Presentation of Financial Statements” and
PSAK 25 “Accounting Policies, Changes in Accounting Estimates and Errors” – Disclosure of Accounting Policies. Furthermore,
DSAK-IAI has also published amendments to PSAK 46 "Income Taxes" – Deferred Tax Related to Assets and Liabilities Arising
from a Single Transaction.

SAK-Umum also includes sharia accounting standards that are not covered in this publication in detail However, Appendix B -
Other Updates provide high level description about the changes and amendments on sharia accounting standards as well as the
updates to other accounting standard pillars (e.g., SAK International and SAK Private entity).

DSAK IAI issued non-standard accounting publications which are referred to as Implementation Bulletin Compilation (“Buletin
Implementasi”). This publication aims to adopt the selected topics decided by the IFRIC Interpretation Committee in the IFAS
context. Until the date of this publication, there are 26 agenda decisions included in the Buletin Implementasi Volumes 1 and 2.

Lastly, as previously communicated, the adoption of IFRS 17, ‘Insurance Contracts’ through PSAK 74, will take into effect
retrospectively in Indonesia beginning the annual reporting period after 1 January 2025. Early adoption is permitted.

Included in this practical guide is our brief guidance on forthcoming requirements that will affect reporters in the coming years
(see the Appendix A page).

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 Amended accounting standard
Amendments to PSAK 16 – Proceeds before Intended Use
Transition Provision: Retrospective

Changes

PSAK 16, ‘Fixed Assets’, requires the proceeds received from selling output produced before the asset is ready for its intended
use to be recognised as income in profit or loss. The related cost of producing the output is measured using the guidance in
PSAK 14, ‘Inventories’, and it is recognised as an expense in profit or loss when sold.

If the items sold are the output of an entity’s ordinary activities, the income and cost are disclosed in accordance with the
requirements of PSAK 72, ‘Revenue from Contracts with Customers’, and PSAK 14. If the items sold are not part of an entity’s
ordinary activities, the amendment to PSAK 16 requires the disclosure of the amount and line item(s) in the statement of
comprehensive income in which such proceeds and cost have been included.

The amendment to PSAK 16 also clarifies that an entity is ‘testing whether the asset is functioning properly’ when it assesses the
technical and physical performance of the asset. The financial performance of the asset is not relevant to this assessment. An
asset might therefore be capable of operating as intended by management and subject to depreciation before it has achieved the
level of operating performance expected by management.

Impact

The amendment to PSAK 16 could have a significant impact on entities that construct material items of PP&E and, as part of the
construction, there is a ramp-up period to test whether the asset is operating as it should; similarly, where resources are
extracted from the earth during the development of a mine which is above a body of resource. For example, when the mine is
under development, there might be certain situations where a company might choose to stockpile ore generated during the
development phase. The level of mineral content within the stockpile will determine whether it is economically viable to develop or
sell the stockpile, which in turn will drive whether management expects to generate proceeds. The amendment will apply, and the
stockpile ore will need to be valued; this is because output, which is expected to be sold, has been generated while the item of
PP&E is in the development phase. Allocation of costs between PP&E and inventory may be necessary.)

Industries that are expected to be significantly impacted are mining and industrial product manufacturers. Management might
need to develop processes to track the cost of output generated during the development phase and to account for an asset as
ready for its intended use earlier than before.

Effective Date

The amendment is effective for annual reporting periods beginning on or after 1 January 2023. However, an entity should apply
the amendment retrospectively, but only to items of PP&E that are brought to the location and condition necessary for them to be
capable of operating in the manner intended by management on or after the beginning of the earliest period presented in the
financial statements in which the entity first applies the amendment. The entity should recognise the cumulative effect of initially
applying the amendment as an adjustment to the opening balance of retained earnings (or other component of equity, as
appropriate) at the beginning of that earliest period presented.

Earlier application is permitted. If an entity applies the amendment for an earlier period, it should disclose that fact.

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 Amendments to PSAK 1, “Presentation of Financial Statements” and PSAK 25
“Accounting Policies, Changes in Accounting Estimates and Errors” – Disclosure of
Accounting Policies and Definition of Accounting Estimates
Transition Provision: Prospective

Changes

The DSAK-IAI amended PSAK 1, ‘Presentation of Financial Statements’, to require companies to disclose their material
accounting policy information rather than their significant accounting policies. Paragraph 117 of the amendment provides the
following definition of material accounting policy information:

“Accounting policy information is material if, when considered together with other information included in an entity’s financial
statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements
make on the basis of those financial statements.”

The amendment also clarifies that accounting policy information is expected to be material if, without it, the users of the financial
statements would be unable to understand other material information in the financial statements. Paragraph 117B of the
amendment provides illustrative examples of accounting policy information that is likely to be considered material to the entity’s
financial statements.

Further, the amendment to PSAK 1 clarifies that immaterial accounting policy information need not be disclosed. However, if it is
disclosed, it should not obscure material accounting policy information.

The amendment to PSAK 25, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, clarifies how companies should
distinguish changes in accounting policies from changes in accounting estimates. Accounting estimates are defined as monetary
amounts in financial statements that are subject to measurement uncertainty. The distinction is important, because changes in
accounting estimates are applied prospectively to future transactions and other future events but changes in accounting policies
are generally applied retrospectively to past transactions and other past events as well as the current period.

Impact

The amendments should help companies:

● to improve accounting policy disclosures, either by making the disclosures more specific to the entity or by reducing generic
disclosures that are commonly understood applications of PSAK; and
● to distinguish changes in accounting estimates from changes in accounting policies.

These amendments are not expected to have a significant impact on the preparation of financial statements.

Effective Date

These amendments should be applied for annual periods beginning on or after 1 January 2023. Earlier application is permitted
(subject to any local endorsement process). The amendments should be applied prospectively.

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 Amendments to PSAK 46 "Income Taxes" – Deferred Tax Related to Assets and Liabilities
Arising from a Single Transaction
Transition Provision: Retrospective

Issue

The DSAK-IAI has amended PSAK 46, 'Income taxes', to require companies to recognise deferred tax on particular transactions
that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. The amendments will
typically apply to transactions such as leases for the lessee and decommissioning obligations.

Paragraphs 15 and 24 of PSAK 46 were amended to include an additional condition where the initial recognition exemption is not
applied. According to the amended guidance, a temporary difference that arises on initial recognition of an asset or liability is not
subject to the initial recognition exemption if that transaction gave rise to equal amounts of taxable and deductible temporary
differences. Paragraph 22A has been added to provide further clarification of this principle. Paragraphs 22(b) and 22(c) of PSAK
46 have also been amended.

In addition, the Illustrative Examples accompanying IAS 12 have been amended to include Example 8 – Leases, to illustrate the
new guidance.

Impact

These amendments might have a significant impact on the preparation of financial statements by companies that have
substantial balances of right-of-use assets, lease liabilities, decommissioning, restoration, and similar liabilities. The impact for
those affected would be the recognition of additional deferred tax assets and liabilities.

Effective Date

These amendments should be applied for annual periods beginning on or after 1 January 2023. Earlier application is permitted.
The amendments should be applied on a modified retrospective basis.

The amendment requires companies, at the beginning of the earliest comparative period presented:

a) to recognise a deferred tax asset – to the extent that it is probable that taxable profit will be available against which the
deductible temporary difference can be utilised – and a deferred tax liability for all deductible and taxable temporary
differences associated with:
● right-of-use assets and lease liabilities; and
● decommissioning, restoration and similar liabilities, and the corresponding amounts recognised as part of the cost of the
related asset; and
b) to recognise the cumulative effect of initially applying the amendments as an adjustment to the opening balance of retained
earnings (or other component of equity, as appropriate) at that date.

This will reflect the opening position, without the need for full retrospective application. The Board concluded that this transition
approach would make the amendments easier and less costly to apply than a full retrospective approach, while still achieving
their objective.

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 Buletin Implementasi Vol 1 and 2
Transition Provision: Retrospective

Background

DSAK IAI published the Buletin Implementasi in 2023. Buletin Implementasi is one of the non-standard products from the DSAK
IAI. It provides a formal position by DSAK that, in implementing the PSAKs, entities should consider the IFRIC Agenda Decisions
reached by the IFRS Interpretations Committee. The document summarised the several IFRIC Agenda Decisions that the board
considered applicable in Indonesia. The board plans to issue several volumes following the development of IFRIC Agenda
Decisions in the future.

Buletin Implementasi consists of explanatory materials discussing about 26 issues (14 issues in Volume 1 and 12 issues in
Volume 2) from 26 IFRIC Agenda Decisions. In the introduction of the Buletin Implementasi and also during the socialisation, the
board emphasised that this document does not add or change requirements in the existing standards. The information included in
the Buletin Implementasi should be regarded as explanatory materials that derive its authority from the accounting standards
themselves. The preparer of financial statements also needs to be aware that the explanation in the Buletin Implementasi is
related to the application of the principles and requirements in accounting standards to a specific transaction or fact pattern and
may not be applicable or may use as analogy to the other circumstances which are not similar to the fact pattern in the Buletin
Implementasi.

For detailed issues published in Buletin Implementasi, please refer to Appendix A.

Impact

There are no changes in the existing standards, but each Buletin Implementasi may provide additional insights that could change
an entity’s understanding of the principles and requirements in PSAKs. Accordingly, an entity may determine that it needs to
change its accounting policies as a result of a Buletin Implementasi.

DSAK anticipates that an entity would have enough time to make necessary changes in its accounting policies and carry out any
modifications needed, for example, in obtaining new data or information, modify its systems and carry out a formal accounting
policy implementation. To assess how much time is sufficient is a matter of judgement that depends on the facts and
circumstances specific to the entity.

Management should think about making disclosures comparable to those made about upcoming standards in accordance with
PSAK 25 where they have determined that a change in an accounting policy is necessary as a result of an Buletin Implementasi
but that change has not yet been made.

Effective Date

Similar to IFRIC Agenda Decisions, each Buletin Implementasi does not contain an effective date or transition provisions; rather
they are anticipated to be implemented immediately.

As the Buletin Implementasi frequently contains explanatory materials providing new information which might otherwise have
been unknown and could not in any way be expected, when changes are made in response to those issues under PSAK 25,
those changes often lead to voluntary accounting policy changes due to the emergence of the new information. This is generally
the case unless it is clearly determined to be an error. As a consequence, a retrospective application is expected except if, based
on the facts and circumstances, a retrospective application is impracticable.

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 APPENDIX A—List of issues covered in Buletin Implementasi Vol 1 and 2

No Issue Description
Buletin Implementasi Vol 1
Related to PSAK 1: Presentation of Financial Statements and PSAK 71: Financial Instruments
1 Presentation of The question discussed is whether the requirement in PSAK 1 to present separately interest
Interest Revenue for revenue calculated using the effective interest method affects the presentation of fair value gains
Particular Financial and losses on derivative instruments that are not part of a designated and effective hedging
Instruments relationship.

It was concluded that this requirement applies only to those assets that are subsequently
measured at amortised cost or fair value through other comprehensive income (subject to any
effect of a qualifying hedging relationship applying the hedge accounting requirements in PSAK
71).
Related to PSAK 16: Fixed Assets and PSAK 73: Leases
2 Lease Term and The agenda decision discussed: 1. How to determine the lease term of a cancellable lease or a
Useful Life of renewable lease and 2. whether the useful life of any related non-removable leasehold
Leasehold improvements is limited to the lease term determined applying PSAK 73.
Improvements
It is observed that in determining the enforceable period of the lease, an entity considers: the
(November 2019)
broader economics of the contract, and not only contractual termination payments and whether
each of the parties has the right to terminate the lease without permission from the other party
with no more than an insignificant penalty. It was also confirmed that reporting entities should
apply paragraphs 56–57 of PSAK 16 in determining the useful life of non-removable leasehold
improvements. If the lease term of the related lease is shorter than the economic life of those
leasehold improvements, the entity considers whether it expects to use the leasehold
improvements beyond that lease term. If the entity does not expect to use the leasehold
improvements beyond the lease term of the related lease, then, applying paragraph 57 of IAS 16,
it concludes that the useful life of the non-removable leasehold improvements is the same as the
lease term.
Related to PSAK 26: Borrowing Costs
3 Over Time Transfer of The discussion was around the capitalisation of borrowing costs, based on a specific fact pattern,
Constructed Good in relation to construction of residential multi-unit real estate development, specifically whether
(March 2019) there are qualifying assets. It was concluded that the receivable, contract asset and inventory
(work-in-progress) for unsold units under construction that the entity recognises are not a
qualifying asset.
Related to PSAK 71: Financial Instruments
4 Financial Assets The discussion was around the applicability of presentation election for an entity to present
Eligible for the subsequent changes in fair value of financial assets in other comprehensive income, rather than
Election to Present profit or loss, if the issuer would classify them as equity applying paragraphs 16A–16D of PSAK
Changes in Fair Value 50. It was concluded that those financial instruments are not eligible for such a presentation
in Other election because those do not meet the definition of an equity instrument in PSAK 50.
Comprehensive
Income (September
2017)
5 Curing of a Credit- The issues addressed in this agenda is about how an entity presents amounts recognised in
impaired Financial statement of profit or loss when a credit-impaired financial asset is subsequently cured - as
Asset (March 2019) interest revenue or, instead, as a reversal of impairment losses. It was concluded that, in the
statement of profit or loss, an entity is required to present the difference described in the request
as a reversal of impairment losses.
6 Credit Enhancement This clarifies that the cash flows expected from a financial guarantee contract, or any other credit
in the Measurement of enhancement cannot be included in the measurement of expected credit losses if the credit
Expected Credit enhancement is required to be recognised separately using PSAK Standards.
Losses (March 2019)
Related to PSAK 72: Revenue from contract with customers
7 Revenue Recognition The discussion addresses the question regarding assessment whether the revenue should be
in a Real Estate recognised over time for the sales of a unit in a residential multi-unit complex. It was observed, in
Contract (March 2018) connection with the specific fact pattern submitted, that the entity did not control the real estate
unit as it was being constructed, because it did not clearly have the power to direct the use of the
unit. Also, it was observed that legal precedent provided evidence that the entity did not have an
enforceable right to payment for work completed to date if the customer were to cancel the
contract.

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 No Issue Description
8 Revenue Recognition This addressed the factors to consider when identifying the performance obligations in a real
in a Real Estate estate contract that includes the transfer of land. These factors could help an entity to determine
Contract that Includes whether the promise to transfer land is a separate performance obligation. It was observed that
the Transfer of Land PSAK 72 requires an entity to consider whether the entity provides a significant service of
(March 2018) integrating the land and the building into a combined output and whether the land and the building
are highly interdependent or highly interrelated.
9 Right to Payment for This decision addresses the existence of an enforceable right to payment in a contract for the sale
Performance of a unit in a residential multi-unit complex (real estate unit). A situation was considered in which
Completed to Date the entity had a right, under the contract with the customer, to receive a payment for the difference
(March 2018) between the resale price of the unit, if any, and the original purchase price (plus selling costs) if the
original customer did not buy the real estate.

It was observed that the assessment of whether the entity has an enforceable right to payment
considers only the payments that the entity is entitled to receive from the customer under the
existing contract. In the case described, the payment did not at all times relate to the completion of
the asset to date (that is, the selling price of the part-constructed real estate), and therefore it was
observed that the amount did not compensate the entity for performance completed to date.

10 Costs to Fulfil a The agenda discusses the recognition of costs incurred to fulfil a contract as an entity satisfies a
Contract (June 2019) performance obligation in the contract over time. In the fact pattern described in the request, the
entity (a) transfers control of a good over time (i.e. one (or more) of the criteria in paragraph 35 of
PSAK 72 is met) and, therefore, satisfies a performance obligation and recognises revenue over
time; and (b) measures progress towards complete satisfaction of the performance obligation
using an output method applying paragraphs 39–43 of PSAK 72.

It was observed that the costs of construction described in the request are costs that relate to the
partially satisfied performance obligation in the contract—i.e. they are costs that relate to the
entity’s past performance. Those costs do not, therefore, generate or enhance resources of the
entity that will be used in continuing to satisfy the performance obligation in the future (paragraph
95(b)). Consequently, those costs do not meet the criteria in paragraph 95 of PSAK 72 to be
recognised as an asset.
Related to PSAK 73: Leases
11 Subsurface Rights This agenda decision discusses a particular contract for subsurface rights. Based on the contract
(June 2019) terms and conditions, a pipeline operator obtains the right to place a pipeline underneath
agricultural land for 20 years in exchange for payments to the landowner. The question discussed
is about the scoping of this contract whether it is PSAK 73, PSAK 19 or other PSAKs. It was
determined that the underground space did not meet the definition of an intangible asset that
would be subject to an optional scope exemption in PSAK 73, because the defined underground
space is tangible in nature. The contract therefore relates to the use of an identified tangible asset.
It was concluded that the contract described in the request contains a lease as defined in PSAK
73.
12 Lessee's Incremental The agenda discusses whether a lessee’s incremental borrowing rate must reflect the interest rate
Borrowing Rate in a loan with both a similar maturity to the lease and a similar payment profile to the lease
(September 2019) payments. It was noted that PSAK 73 does not explicitly require the IBR to reflect the interest rate
in a loan with a similar payment profile to the lease payments. Nonetheless, in applying judgement
to determine the IBR, it would be consistent with the Board’s objective, when developing the
definition of the IBR, to refer to the rate for a loan with a similar payment profile to that of the lease
as a starting point, if such a rate was readily observable.
13 Sale and Leaseback The discussion was around the measurement of a seller-lessee’s right-of-use asset arising from a
with Variable sale and leaseback transaction with variable payments calculated as a percentage of the seller-
Payments (June 2020) lessee’s revenue generated using the PPE during the lease term and the determination of the
amount of any gain or loss recognised at the date of the transaction.

To measure the right-of-use asset arising from the leaseback, it was noted that IFRS 16 does not
prescribe a method for determining the proportion of the PPE transferred to the buyer-lessor that
relates to the right of use retained. In the transaction described in the request, the seller-lessee
could determine the proportion by comparing, for example, (a) the present value of expected
payments for the lease (including those that are variable), with (b) the fair value of the PPE at the
date of the transaction. The gain or loss the seller-lessee recognises at the date of the transaction
is a consequence of its measurement of the right-of-use asset arising from the leaseback.
14 Definition of a Lease - The discussion was around whether the customer has the right to direct the use of a ship where
Decision-making many, but not all, decisions about how and for what purpose the ship is used are predetermined in
Rights (January 2020) the contract. The customer has the right to make the remaining decisions about how and for what
purpose the ship is used throughout the period of use. It was concluded that, in the fact pattern
described in the request, the customer has the right to direct the use of the ship throughout the
period of use. Consequently, the contract contains a lease.
Buletin Implementasi Vol 2
Related to PSAK 1: Presentation of Financial Statements,

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 No Issue Description
PSAK 2: 2 Statement of Cash Flows and
PSAK 60: Financial Instruments–Disclosures
15 Supply Chain This discussion was around the accounting for supplier chain financing arrangements (reverse
Financing factoring) specifically, the presentation of liabilities that are part of reverse factoring arrangements,
Arrangements— the presentation of the related cash flows, and the information to disclose in the notes about, for
Reverse Factoring example, liquidity risks that arise in such arrangements.
Related to PSAK 2: Statement of Cash Flows
16 Demand Deposits with This topic discusses a specific fact pattern regarding a demand deposit that is subject to
Restrictions on Use contractual restrictions on use agreed with a third party.
arising from a Contract
with a Third Party (IAS It was concluded that, in the fact pattern described in the request, the entity presents the demand
deposit as cash and cash equivalents in its statement of financial position. When relevant to an
7)
understanding of its financial position, the entity would disaggregate the ‘cash and cash
equivalents’ line item and present the demand deposit separately in an additional line item.
17 Identification of cash This topic discusses whether investments in shares or units of money market mutual funds that
equivalents - can be exchanged at any time can be classified as cash and cash equivalents.
Investments in shares
or units of money It was noted that the units cannot be considered cash equivalents simply because they can be
converted to cash at any time at the then market price in an active market, which means that the
market funds
amount of cash that will be received is unknown at the time of the initial investment and the risk of
redeemable (July changes in value could be significant. Under PSAK 2, cash equivalents must be ‘convertible to
2009) known amounts of cash’ and ‘subject to insignificant risk of changes in value’.
18 Identification of Cash This topic discusses the basis of the period in determining a consistent investment classification: is
Equivalents--Financial it "from the reporting date to the maturity" or "from the date of acquisition to maturity”?
Assets
It was noted, that based on PSAK 2, an investment is classified as a cash equivalent only if the
investment has a short maturity from the date of acquisition.

19 Classification of short- This topic discusses whether short-term loans for cash management can be classified as
term loans and credit components of cash and cash equivalents. Additional information is that short-term arrangement
facilities (IAS 7) balances do not frequently fluctuate from negative to positive.

Based on PSAK 2 para 8, bank loans must be repaid on demand and form an integral part of cash
management, so that they can be classified as components of cash and cash equivalents.

However, the fact that arrangement balances do not frequently fluctuate from negative to positive
suggests that short-term arrangements are a form of financing. In addition, there is additional
information that this short-term arrangement cannot be repaid upon request.

Accordingly, short-term arrangements in this fact pattern are not components of cash and cash
equivalents.
Related to PSAK 10: The Effects of Changes in Foreign Exchange Rates and PSAK 74: Insurance Contracts
20 Multi-currency Groups This topic discusses whether forex risk needs to be considered in identifying groups of multi-
of Insurance Contracts currency insurance contracts and the application of PSAK 10 in connection with transactions
(IFRS 17 and IAS 21) regulated under PSAK 74.

Under PSAK 74 paragraph 14, entities are required to consider all risks and group insurance
contracts based on similar risks without specifying a particular type of risk ("identical risk").

IFAS include no explicit requirements on how to determine the currency denomination of

transactions or items with cash flows in more than one currency. Therefore, it was observed that,
in measuring a multi-currency group of insurance contracts, an entity uses its judgement to
develop and apply an accounting policy that determines on initial recognition the currency or
currencies in which the group—including the contractual service margin—is denominated
(currency denomination). The entity could determine that the group— including the contractual
service margin—is denominated in a single currency or in the multiple currencies of the cash flows
in the group.
Related to PSAK 71: Financial Instruments and PSAK 73: Leases
21 Lessor Forgiveness of This topic discusses how the lessor applies the expected credit loss model in PSAK 71 to the
Lease Payments operating lease receivable before the rent concession is granted if it expects to forgive payments
(IFRS 9 and IFRS 16) due from the lessee under the lease contract and whether the lessor applies the derecognition
requirements in PSAK 71 or the lease modification requirements in PSAK 73 in accounting for the
rent concession.
It was concluded that the lessor should record the lease concession with the above fact pattern on
the date the concession is granted by applying the following requirements:
1. impairment and derecognition in accordance with PSAK 71 and
2. lease modification of the forgiven lease payments that have not been recognised as receivable
operating leases in accordance with PSAK 73.

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 No Issue Description
Related to PSAK 72: Revenue from contract with customers
22 Assessment of This topic discusses the performance obligation of a stock exchange that provides a listing service
Promised Goods or to a customer, specifically whether the stock exchange promises to transfer an admission service
Services (IFRS 15) that is distinct from the listing service.

Based on the fact pattern described in the request, it was concluded that the stock exchange does
not promise to transfer any goods or service to the customer other than the service of being listed
on the exchange.
23 Compensation for This topic discusses the recognition of compensation for flight delays or cancellations, whether as
Delays or variable compensation (PSAK 72) or contingent liabilities (PSAK 57)?
Cancellations (IFRS
15 Revenue from It was concluded that compensation for delays or cancellations, as described in the request, is a
variable consideration in the contract.
Contracts with
Customers)
24 Training Costs to Fulfil This topic discusses the recognition of training costs to fulfil contracts by an outsourcing company.
a Contract (IFRS 15) As additional information, this training fee can be charged to the customer.

It was concluded that, in the fact pattern described in the request, the entity applies PSAK 19 in
accounting for the training costs incurred to fulfil the contract with the customer. Accordingly, the
entity recognises the training costs to fulfil the contract with the customer as an expense when
incurred. It was noted that the entity’s ability to charge to the customer the costs of training does
not affect that conclusion.

25 Principal versus This topic discusses how a reseller of software licences determines if it is a principal or an agent,
Agent: Software in applying the requirements in PSAK 72 to a specific fact pattern.
Reseller (IFRS 15)
It was observed that the conclusion as to whether the reseller is a principal or agent depends on
the specific facts and circumstances, including the terms and conditions of the relevant contracts.
The reseller would apply judgement in making its overall assessment of whether it is a principal or
agent — including considering the relevance of the indicators to the assessment of control and the
degree to which they provide evidence of control of the standard software licences before they are
transferred to the customer — within the context of the framework and requirements set out in
paragraphs PP34–PP38 of PSAK 72.
Related to PSAK 74: Insurance Contracts
26 Transfer of Insurance This topic discusses how an insurer of a group of annuity contracts determines the amount of the
Coverage under a contractual service margin to be recognised in profit or loss for a period due to the transfer of
Group of Annuity survival insurance coverage for that period.
Contracts (IFRS 17)
PSAK 74 does not prescribe a method for determining the quantity of the benefits provided under
a contract. Instead, an entity is required to use a method that meets the principle in paragraph
PP119 of reflecting the insurance contract services provided in each period. In selecting a method
that meets that principle, an entity considers (a) the benefits provided to the policyholder under a
contract with respect to the insurance contract services provided, and (b) when those benefits are
provided. Different methods may achieve the principle depending on the facts and circumstances.
From the methods described in the fact pattern of the request, the amount of the annuity payment
the policyholder is able to validly claim meets the principle in paragraph PP119 of PSAK 74 of
reflecting the insurance coverage provided in each period. This approach is referred to as “Method
1” in the fact pattern of the request.

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 APPENDIX B—Forthcoming requirements

Title Key Requirements Effective Date

PSAK 74, ‘Insurance This standard will make financial statements of insurance companies 1 January 2025
Contracts’ comparable with other industries and require a clear separation between income and early
generated from the insurance business and income from investment activities in adoption is
order to make financial statement information transparent for all stakeholders. allowed.
Amendment to PSAK 1, The amendment to PSAK 1, ‘Presentation of Financial Statements’, clarify how 1 January 2024
‘Presentation of Financial conditions with which an entity must comply within twelve months after the and early
Statements’: Non-current reporting period affect the classification of a liability. adoption is
Liabilities with Covenants allowed.
Amendment to PSAK 73, The amendment to PSAK 73, ‘Leases’ includes requirements for sale and 1 January 2024
‘Leases’: Leases on Sale leaseback transactions in PSAK 73 to explain how an entity accounts for a sale and early
and Leaseback and leaseback after the date of the transaction. Sale and leaseback transactions adoption is
where some or all the lease payments are variable lease payments that do not allowed.
depend on an index or rate are most likely to be impacted.

12 | PwC | A Practical Guide to the New and Revised Indonesian Financial Standards for 2023
 APPENDIX C—Other Updates

Pillars Title Key Requirements Effective Date

International SAK International DSAK IAI has released Standar Akuntansi Keuangan 1 January 2024
Internasional (SAK International) in May 2023. This will
be a new pillar among the other accounting standards
pillars (Umum, EMKM and private entities Pillars) in
Indonesia's financial reporting environment. The set of
standards in SAK International are a word-to-word
translation from IFRS, which make the entities prepare
the financial statements under SAK International
equivalent/identical with their IFRS financial statements.
Up to date of this publication, the regulations around the
implementation are still being discussed by the capital
market regulator.
Private entity The Private Entity On 30 June 2021, the Financial Accounting Standards 1 January 2025
Financial Accounting Board of the Indonesian Institute of Accountants (DSAK
Standards (SAK EP) IAI) ratified the Private Entity Financial Accounting
Standards (SAK EP) which is the adoption of IFRS for
SMEs taking into account conditions in Indonesia. SAK
EP will be effective in 2025 and allowed to be applied
earlier. SAK EP will replace SAK for Entities Without
Public Accountability (ETAP).
General - Shariah Amendment to PSAK 107 The amendment to PSAK 107, ‘Ijarah Accounting’, 1 January 2023
Standard (Revised 2021) – Ijarah added accounting requirements for ijarah contracts of
assets and also service. The amendment clarifies that
the ijarah contract scope is not only sharia financing by
Islamic banks and financial institution, but also ijarah
contract by non-financial sector such as hospitality and
hospital business.
Amendment to PSAK 109 The amendment of PSAK 109, Zakat, Infaq and 1 January 2024
(Revised 2022) – Zakat, Sadaqah provides guidance related to how the entity
Infaq and Sadaqah accounts for the fair value fluctuation from subsequent
measurement of zakat, infaq and sadaqah. In addition,
the standard also provides accounting guidance to
account for the difference between the cash received
from sales of non-cash zakat, infaq and sadaqah assets
and its carrying amounts.
Amendment to PSAK 101 Amendment to PSAK 101 (2022) eliminates the 1 January 2024
(Revised 2022) – statement of changes in managed assets (laporan
Presentation of Sharia perubahan aset kelolaan) as one of the financial
Financial Statements statement components in the face of a set of financial
statements. That information related to managed assets
is disclosed in the notes to the financial statements.
Sharia accounting DSAS IAI on 18 January 2023 issued an annual
standard - Annual improvement. Annual improvements are only editorial
improvement 2023 changes which do not change the substance of existing
requirements. The standards improved are PSAK 109:
Accounting for Zakat, Infaq and Sadaqah and PSAK
112, Accounting for Wakaf.

13 | PwC | A Practical Guide to the New and Revised Indonesian Financial Standards for 2023
For professional accounting advice, please contact:

Djohan Pinnarwan Irwan Lau

djohan.pinnarwan@pwc.com irwan.lau@pwc.com

Dedy Lesmana Andri Effendi

dedy.lesmana@pwc.com andri.effendi@pwc.com

Jasmin Maranan Ponco Widagdo

jasmin.m.maranan@pwc.com ponco.widagdo@pwc.com

Ivina Hartopo Andi Harun

ivina.hartopo@pwc.com andi.harun@pwc.com

Helen Bagalanon
helen.b.bagalanon@pwc.com

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