2012 IFRS Convergence Programin Indonesia

Rosita Uli SinagaChairman of The Indonesian Financial AccountingStandards Board (DSAK-IAI)

The Indonesian Institute of Accountants

IIA Congress 8th -10th December 2010

What is IFRS?

2

IFRSAdvisoryCouncil

IFRIC

IASB Governance Structure

The Target of 2012 IFRS Convergencein Indonesia

4

o Revising PSAK to reach material compliancewith IFRS as of 1 January 2009, which will beeffective at year 2011/2012.

o We use gradual approach rather than Big Bangapproach

Indonesia IFRS ConvergenceRoadmap

Adoption Stage(2008-2010)

• Adopting all IFRSto PSAK

• Preparation fornecessaryinfrastructure

• Evaluation andmanaging theadoption impact toSAK

Final PreparationStage (2011)

• Partial applicationof the standard

• Finishing thestandardpreparation ornecessaryinfrastructure

ImplementationStage (2012)

• The application ofthe standard

• Evaluation of IFRSadoption impact tothe businessenvironment

• Define strategy forfull adoption

5

How We do it in Indonesia

o Gradual approach not big bang approach

o Establish IFRS implementation team to support DSAK onimplementation challenges

o Support from Ministry of SOE by establishing IFRS taskforce team to assist SOE in implementing IFRS

o Improve the cooperation with industry associations

o Support from the accountant academics in disseminatingconvergence updates through out Indonesia and researchon IFRS implementation issues.

6

New Standards andInterpretations

Effective on2010

• 3 new AccountingStandards (PSAK)

• Withdrawal of 9AccountingStandards

• Withdrawal of 1Interpretation

Effective on2011

• 16 NewAccountingStandards (PSAK)

• 7 NewInterpretations(ISAK)

Effective on2012

(estimated)

• 11 NewAccountingStandards (PSAK)

• 5 Interpretations(ISAK)

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Please see the appendix for more details

The Progress of IFRS Adoption inIndonesia

0

5

10

15

20

25

30

35

40

01-Jan-0701-Jan-08

01-Jan-0901-Jan-10

01-Jan-11

2

9 10

23

33

37 37 37 37 37

IFRS Adopted Total IFRSEstimated

8

12/14/2010

90%

IFRSs which Are Still UnderDiscussion for Adoption in 2012

o IFRS 1: First Time Adoption

o IFRS 4 : Insurance Contract

o IFRS 6 : Exploration and Evaluation MineralResources

o IAS 41 : Agriculture

The Board is observing the current developmentof IASB for those standards.

9

NON COMPARABLE PSAK

No PSAK DSAK Position as of1 Dec 2010

1 PSAK 21 Ekuitas (Equity) Will be Revoked

2 PSAK 27 Akuntansi Koperasi (Accounting forCooperatives)

Will be Revoked

3 PSAK 38 Restrukturisasi Ekuitas Sepengendali(Common Control Restructuring)

Not Decided

4PSAK 44 Aktivitas Pengembangan Real Estate (RealEstate Activity)

Will be Revoked,Replaced by IFRIC 15(ISAK 21)

5 PSAK 51 Kuasi Reorganisasi (Quasi) Not decided

6 PSAK 45 Akuntansi Entitas Nirlaba (Non ProfitAccounting)

Revised

7 PSAK 47 Akuntansi Tanah (Accounting for Land Not decided

8 PSAK 39 Akuntansi Kerja Sama Operasi (Accounting forOperational Cooperation)

Not decided

The Accounting Standard Frameworkin Indonesia

2010-2012 > 2012

SAK UMUM

• IFRS based PSAK• Shari’ah Standards• PSAK Non IFRS

(including SAK forNon Profit)

SAK-ETAP (PSAKfor SME)

SAK UMUM

• IFRS based PSAK• PSAK NON IFRS (Including

syari’ah)

SAK ETAP (PSAK forSME)

SAK for Non profit

11

IFRS – Active projects 2010IFRS Target issuance

Conceptual framework (8 phases) From Q2 2010 to undetermined yet

Consolidation, including SPE (to replace IAS 27) Q4 2010

Derecognition (new IFRS) Q4 2010

Amendments to IFRS 5 Q2 2010

Emissions trading schemes (new IFRS) Q2 2011

Fair value measurement guidance Q3 2010

IFRS 9 (phase 2&3) Q4 2010

Financial statement presentation (to replace IAS 1 & 7) Q2 2011

Amendments to IAS 12 Q2 2011

Insurance contract (phase 2) Q2 2011

Amendments to IAS 31 (Joint ventures) Q2 2010

Amendments to IAS 17 Q2 2011

Amendments to IAS 37 (Provisions) Q4 2010

Amendments to IAS 19 Q2 2010

Amendments to IAS 18 Q2 2011

The gap – 1 January 2012

1 Jan 2009 2010 2011 2012

IFRS

PSAK

The gap after 1 January 2012(an illustration only)

1 Jan 2009 2010 2011 2012 2013 ????????

IFRS

PSAK

Accountant Perception on the IFRSConvergence in Indonesia*

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Strongly Negative1%

Negative21%

Positive72%

Strongly Positive6%

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

Survey to Bankers on the Implementation ofFinancial Instruments Standards

Questions Response TotalResponse

Does the key management support theimplementation of IAS 32 and IAS 39?

Yes96.43%

56

Does the implementation of the standardsresult the change in the bank’s informationsystem?

Yes92.6%

54

Does the implementation of the standardsprovide more relevant information aboutbank’s financial performance?

Yes89.8%

49

16

Total Respondent is 56 bankers, survey was collected during the Central Bank’sSeminar, 24th November 2010

Challenges of IFRS Convergence

o The convergence process of relevant laws andregulations (BAPEPAM, Central Bank, Tax, etc)

o Dissemination of IFRS Convergence information toall stakeholders through out Indonesia

o IFRS is moving target

o Readiness of other infrastructure (otherspecialists, lecturers, accounting syllabi and textbooks, auditing standards)

o The mind set shift from rule based to principlebased among all players (preparers, auditors andregulators)

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Plans for The Future

o More involvement in the international forumn AOSSG (Asian Oceania Standard Setter Group)o Involve in 6 working groups:

Revenue, Leases, Consolidation, InsuranceContract, Islamic Finance and Agriculture.

n IAI is the Host of The 5th IFRS Regional Policy Forumo 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 providelegal 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 AKUNTANJl. Sindanglaya No.1 Menteng, Jakarta Pusat

Telp. 021 31904232Fax. 021 7245078

Email:Website::

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Appendix: List of the AccountingStandards and Interpretationwith their effective date

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No PSAK/ISAK Ref Issued Effective date

1. PSAK 13 Properti Investasi IAS 40 2007 1 January 2008

2. PSAK 16 Aset Tetap IAS 16 2007 1 January 2008

3. PSAK 30 Sewa IAS 17 2007 1 January 2008

4. PSAK 14 Persediaan IAS 2 2008 1 January 2009

5. PSAK 26 Biaya Pinjaman IAS 23 2008 1 January 2010

6. PSAK 50 Instrumen Keuangan:Penyajian dan Pengungkapan

IAS 32 2006 1 January 2010

7. PSAK 55 Instrumen Keuangan:Pengakuan dan Pengukuran

IAS 39 2006 1 January 2010

8. ISAK 8 Penentuan Apakah SuatuPerjanjian Mengandung SuatuSewa dan Pembahasan LebihLanjut Ketentuan Transisi

IFRIC 4 2007 September 2008

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No PPSAK Issued Effective

1. PPSAK No.1 PencabutanPSAK 32: Akuntansi Kehutanan,PSAK 35: Akuntansi Pendapatan JasaTelekomunikasiPSAK 37: Akuntansi Penyelenggaraan Jalan Tol

2009 1 January 2010

2. PPSAK No. 2 PencabutanPSAK 41: Akuntansi WaranPSAK 43: Akuntansi Anjak Piutang

2009 1 January 2010

3. PPSAK No. 3 PencabutanPSAK 54: Akuntansi Restrukturisasi Utang-Piutang Bermasalah

2009 1 January 2010

4. PPSAK No. 4 PencabutanPSAK 31 (revisi 2000) Akuntansi Perbankan,PSAK 42: Akuntansi Perusahaan Efek, danPSAK 49: Akuntansi Reksa Dana

2009 1 January 2010

5. PPSAK No. 5 PencabutanISAK 06: Interpretasi Atas Paragraf 12 dan 16PSAK No. 55 (1999) Tentang Instrumen DerivatifMelekat Pada Kontrak Dalam Mata Uang Asing

2009 1 January 2010

No PSAK Reference

1. PSAK 1Penyajian Laporan Keuangan

IAS 1Presentation of Financial Statement

2. PSAK 2 Laporan Arus Kas IAS 7 Statement of Cash Flow

3. PSAK 3Laporan Keuangan Interim

IAS 34Interim Financial Reporting

4. PSAK 4Laporan Keuangan Konsolidasian dan LaporanKeuangan Tersendiri

IAS 27Consolidated and Separated FinancialStatement

5. PSAK 5 Segmen Operasi IFRS 8 Operating Segment

6. PSAK 12Bagian Partisipasi dalam Ventura Bersama

IAS 31Interests in Joint Ventures

7. PSAK 7Pengungkapan Pihak-Pihak yang Berelasi

IAS 24Related Party Disclosures

8. PSAK 15Investasi Pada Entitas Asosiasi

IAS 28Investments in Associates

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No PSAK Reference

9. PSAK 19 Aset Takberwujud IAS 38 Intangible Assets

10. PSAK 22 Kombinasi Bisnis IFRS 3 Business Combination

11. PSAK 23 Pendapatan IAS 18 Revenue

12. PSAK 25Kebijakan Akuntansi, Perubahan EstimasiAkuntansi & Kesalahan

IAS 8Accounting Policies, Changes inAccounting Estimates and Errors

13. PSAK 48 Penurunan Nilai Aset IAS 36 Impairment of Assets

14. PSAK 57Provisi, Liabilitas Kontijensi & AsetKontijensi

IAS 37Provisions, Contingent Liabilities

15. PSAK 58Aset Tdk Lancar Yg Dimiliki Untuk Dijual& Operasi Yg Dihentikan

IFRS 5Non-current Assets Held for Saleand Discontinued

16 PSAK 8Peristiwa Setelah Tanggal Neraca

IAS 10Event after balance sheet date

25

No ISAK Reference

1. ISAK 7Konsolidasi Entitas Bertujuan Khusus

SIC 12Consolidation – Special Purposes Entities

2. ISAK 9Perubahan atas Liabilitas Purna Operasi,Liabilitas Restorasi & Liabilitas Serupa

IFRIC 1Changes in existing decommissioning,restoration and similar liabilities

3. ISAK 10Program Loyalitas Pelanggan

IFRIC 13Customer Loyalty Programs

4. ISAK 11Distribusi Aset Non Kas Kepada Pemilik

IFRIC 17Distributions of Non-cash Assets to Owners

5. ISAK 12Pengendalian Bersama Entitas: KontribusiNonmoneter oleh Venturer

SIC 13Jointly Controlled Entities – Non Monetary

6. ISAK 14Aset Takberwujud; Biaya Situs Web

SIC 32Intangible Assets – Web Site Costs

7. ISAK 17

Laporan Keuangan Interim dan PenurunanNilai

IFRIC 10 Interim Financial Reporting andImpairment

26

No PSAK Reference

1 PSAK 10: Pengaruh PerubahanKurs Valuta Asing

IAS 21: The Effect of Changes inForeign Exchange Rates

2. PSAK 18Akuntansi dan PelaporanProgram Manfaat Purnakarya

IAS 26Accounting an reporting by retirementbenefit plans

3. PSAK 24Imbalan Kerja

IAS 19Employee Benefits

4. ED PSAK 34Akuntansi Kontrak Konstruksi

IAS 11Construction Contract

5. ED PSAK 46Akuntansi Pajak Penghasilan

IAS 12Income Taxes

6 PSAK 53Pembayaran Berbasis Saham

IFRS 2Share-based payment

27

No PSAK Reference

7 PSAK 50 : InstrumenKeuangan: Penyajian

IAS 32: Financial Instruments:Presentation

8. KED PSAK 56 (ED akan keluarDes 2010)Laba per saham

IAS 33Earnings per share

9. PSAK 60: InstrumenKeuangan:Pengungkapan

IFRS 7Financial Instrument : Disclosure

10. PSAK 61: Akuntansi HibahPemerintah Dan PengungkapanBantuan Pemerintah

IAS 20Accounting for government grants anddisclosure of government assistance

11. ED PSAK 63: PelaporanKeuangan dalam EkonomiHiperinflasi

IAS 29Financial Reporting in hyperinflationaryeconomies

28

No ISAK Reference

1. ISAK 13

Lindung Nilai Investasi Neto dalam KegiatanUsaha Luar Negeri

IFRIC 16 Hedges of Net Investment in aForeign Operation

2. ISAK 16Perjanjian Konsesi Jasa

IFRIC 12 Service Concession Arrangements.

3. ISAK 15PSAK 24 - Batas Aset Imbalan Pasti,Persyaratan Pendanaan Minimum DanInteraksinya

IFRIC 14: IAS 19 – The Limit on a DefinedBenefit Asset, Minimum FundingRequirements and Their Interaction

4 ISAK 18: Bantuan Pemerintah-Tidak AdaRelasi Specifik dengan Aktivitas Operasi

SIC-10 Government Assistance—No SpecificRelation to Operating Activities

5 ED ISAK 19:Penerapan Pendekatan Penyajian Kembali dalamPSAK 63: Pelaporan Keuangan dalam EkonomiHiperinflasi

IFRIC 7: Applying the Restatement Approach underIAS 29: Financial Reporting in Hyperinflationaryeconomies

6 ED ISAK 20: Pajak Penghasilan-Perubahandalam Status Pajak Entitas atau ParaPemegang Sahamnya

SIC-25 Income Taxes—Changes in the TaxStatus of an Entity or its Shareholders

7 ED ISAK 21: Perjanjian Konstruksi Real Estate IFRIC 15: Real Estate Construction Agreement

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Pencabutan Berlaku 1 January 2012

No PPSAK

1. ED PPSAK 6: Pencabutan PSAK 21:Akuntansi Ekuitas, ISAK 1: Penentuan HargaPasar Dividen, ISAK 2: Penyajian Modaldalam Neraca dan Piutang kepada PemesanSaham, ISAK 3: Akuntansi atas PemberianSumbangan atau Bantuan

2 ED PPSAK 7: Pencabutan PSAK 44 PerjanjianKontruksi Real Estate

3 ED PPSAK 8: Pencabutan PSAK 27:Akuntansi Koperasi

30