Accounting Firm, Law Firm & Curator



Indonesian Tax Voluntary Disclosure Program

June 1, 2022

Hi my Indonesian friends, have any of you ever received a letter of request for clarification ("SP2DK") from the Tax Office stating that the amount of additional assets during 2016 to 2020 did not match the amount of income reported on Tax Return? If the number of difference is huge and you are not willing to make corrections, pay "PPS" a.s.a.p. There is still time until June 30, 2022. The rate is 14% for domestic assets.

Currently the government is planning to eliminate Tax ID ("NPWP") and replace it with Citizen ID Card No. ("NIK") which will take effect in early 2023. This will open wider access for Tax Officers to track transactions. Therefore, let's pay taxes according to the income we receive, and prepare tax planning if needed.


Going Concern Assessment During Covid-19 Pandemic

February 24, 2022

How are you, company management? Have you updated the going concern assessment in your company during the COVID-19 pandemic?

In accordance with SA 570, the auditor has the responsibility to obtain sufficient appropriate audit evidence about the appropriateness of management's use of the going concern basis of accounting in the preparation of the financial statements, and to conclude whether there is a material uncertainty about the entity's ability to continue as a going concern. There are 3 things to note: First, the use of the going concern basis of accounting must be appropriate, disclose all things that can affect the company's going concern, both subsequent events and after. Second, check whether there is material uncertainty. During this pandemic, companies can make or update their financial statements projection, especially in the sensitivity section, by adding a downside scenario in case of additional lockdown. Check the liquidity ratio and working capital requirements, and make sure to include all covenants in the projection. Third, if there is significant doubt, management should be willing to make or extend its assessment by preparing a plan to mitigate so that bad scenarios can be resolved. In addition, it is also necessary to pay attention to the latest regulations from the government related to the Covid-19 pandemic.


Economic Stimulus for Indonesian Rural Banks (“BPR”) in Facing COVID-19 and Preparations for Welcoming SAK EP

August 27, 2021

How are you Indonesian Rural Bankers? Have you implemented the economic stimulus for COVID-19? During the turmoil of the COVID-19 pandemic in Indonesia, the government has provided a stimulus for all banks since 2020 with the issuance of “OJK” Regulation No.11/POJK.03/2020, updated to “OJK” Regulation No.48/POJK.03/2020 which includes the following: loan disbursement of < IDR 10 bio can be analyzed only by looking at the historical ability to service the debt, granting new loan to debtors can be done separately regardless of the quality of the previous loan, and restructuring can be carried out for all types of loan regardless of the borrowing limit and type of loan. The quality of the restructured loan can also be determined as “Current” if the debtor is affected by COVID-19. Nevertheless, Banks must also apply risk management in implementing this stimulus which includes: preparing guidelines to determine which debtors are affected by COVID-19, evaluating which debtors can survive, recording allowance for debtors who are considered unable to survive, overseeing the capital adequacy as well as the additional expected loss allowance for anticipation, and checking the bank soundness periodically.

The government provided additional stimulus for Rural Banks (“BPR”) with the issuance of “OJK” Regulation No.34/POJK.03/2020, updated to “OJK” Regulation No.2/POJK.03/2021. This is because the Rural Banks main target market is the MSME sector. In this case, Rural Banks may: use a general “PPAP” of less than 0.5% for current quality productive assets, use the percentage of foreclosed assets as a tier I capital deduction factor in the calculation of CAR, ignore the maximum limit for inter-bank placements to overcome liquidity problems, reduce the training cost to less than 5% of the previous year Human Resource costs realization, and ensure that the distribution of dividends or ”tantiem” does not have any impact on capital adequacy. In connection with this, Rural Banks are required to simulate the impact of implementing the stimulus on the capital adequacy.

Apart from all that, Rural Banks that are still using “SAK ETAP” need to make preparations to welcome the new “SAK EP” which will be effective in 2025. The most important thing is the change in the calculation of the allowance for impairment losses which currently uses the “PPAP” policy will be required to use the calculation in accordance with PSAK 55 (adopted from IAS 39).

Let's apply this economic stimulus and start updating your allowance for impairment losses system!


Outsourced Accounting vs In-House Accountant

July 1, 2021

How are you, business owners? Have you ever thought about using outsourced accounting service? Why many people nowadays prefer to use outsourced accounting service rather than using in-house accountants?  Don't you want to know the answer? It is because:


Outsourced accounting services often provide higher quality and expertise. Employees of outsourced services are usually experts who undergo continual training in accounting and technology. Many Micro, Small and Medium scale companies do not even provide training for their accountants due to cost issues.


Outsourcing helps reduce the risk of fraud. By using outsourced accounting services there will be a separation of duties and ore rigorous steps taken when preparing the financial statements.


Outsourcing your accounting can help alleviate late, inaccurate or meaningless financial reporting. Financial reporting will be on time and accurate when outsourcing because employees are trained, experienced and only focus on their core job descriptions.


Cost difference between In-House and Outsourced accounting. The cost of using an in-house accountant is certainly more expensive than using outsourced accounting services. This is because in-house accountants work for a full-time and there are additional costs such as: Medical Allowances, Retirement Plans, THR Allowances, Leave Allowances, Overtime Allowances, Training Fees, and others. And of course there are severance costs if the employee is dismissed or has entered retirement period. Moreover, during a pandemic like this, the costs for in-house accountants continue to run even though they work at home.


Cryptocurrency Accounting Treatment

June 8, 2021

Have you ever thought about how the accounting treatment for Cryptocurrency is? Is Cryptocurrency a Cash, Financial Asset, Inventory, or Intangible Asset? It seems inappropriate to recognize Cryptocurrency as Cash, because they cannot readily be exchanged for any good or service as defined in PSAK 2/IAS 7. What about Financial Asset? It doesn't seem right either, because Cryptocurrency is not a debt security, nor an equity security. It does not represent an ownership interest in an entity as defined in PSAK 71/IFRS 9.

According to the International Financial Reporting Interpretations Committee (IFRIC), Cryptocurrency can be recognized as Inventory (FV less cost to sell) if it is held for trading; and as an Intangible Asset (Revaluation “or” Cost Model) if it is for other purposes. Most Cryptocurrencies have an indefinite useful life so there is no need to calculate any amortization.

Then how is the accounting treatment for Cryptocurrency Miners? Of course this is not a part of PSAK 72/IFRS 15 because there are no contracts, and the rewards are not paid by any counterparty, but through a system algorithm. In this case, the Conceptual Framework can be a reference. The obtained reward can be recorded as (Dr) Intangible Asset “or” Inventory, (Cr) Income in P/L.


Appropriate Recording of Rental Transactions

May 11, 2021

How do you record lease transactions in your company? Have you implemented PSAK 73 (adopted from IFRS 16, replacing PSAK 30)? If you record all rental transactions as Rental Expenses, then there is a possibility that you have not applied PSAK 73. Let's get to know the concept of it.

According to PSAK 73, every contract that contains a lease must be tested whether it is a Right of Use Asset or an Operating Lease. There are 2 main things that need to be considered: 1) Is the leased asset a low value asset? In this case there is no standard rule for calculating the materiality limit for low value asset and usually companies use the amount of USD 5,000; 2) Is the contract period “more than” 12 months? The company must recognize the Right of Use Asset if all of the two criteria above are met. In presenting the Right of Use Asset, companies must first calculate the amount of lease liability using the present value principle. The present value is discounted using an implicit interest rate or an incremental interest rate (if the implicit interest rate cannot be determined).

Try to re-check your rental contracts again. If you need a sample procedure of PSAK 73, please request to us! It's free.


What is POCI?

May 10, 2021

Let's be aware of “Purchased or Originated Credit Impaired (POCI)” transactions. POCI is a receivable that is already impaired at the time when it is purchased or originated. An example of it is the purchase of a Non Performing Loan (NPL). If there is a transaction like this, how do you record it?

It should be noted that the recording of POCI is different from the financial instrument transactions in general. The initial recognition of POCI is based on the purchase price and after that it is necessary to recalculate the Expected Credit Loss (ECL) by making an expected cash flow and put in the LGD component using the collateral shortfall method. If the POCI purchase price is lower than the recalculated net book value, it is not necessary to provide the allowance for impairment losses; vice versa. What if the company receives cash from the collection and/or collateral sales? It should be recorded as a deduction of the purchase price of POCI. If the company receives more than the POCI’s purchase price, the excess should be recorded as income in the P/L Statement.

Let’s get to know POCI together even more!


PSAK 71, Is It Complicated?

May 10, 2021

Does the company you work for hold a financial instrument? Let's get to know what a financial instrument is. Financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Therefore, if your company has such contract(s), it is necessary to consider whether they are financial instruments or not.

According to the Indonesian accounting standard, PSAK 71 (adopted from IFRS 9; replacing PSAK 50, 55 & 60), every financial instrument must be tested with SPPI and Business Model Test and classified into the appropriate category. Furthermore, Any financial instruments that are categorized other than Fair Value Through Profit/Loss must be presented along with the allowance for impairment losses based on the principle of Expected Credit Loss (ECL) which is divided into 3 stages plus the Forward Looking scenarios. There are many statistical models that can be used to calculate the Probability of Default of the ECL, such as: Cohort, Markov Chain, and so on. All of which have a similarity. They calculate possible credit losses based on the current and historical data of the instrument and/or the similar instrument(s).

If you need a sample procedure of PSAK 71, please request to us! It's free.


Prepare Yourself for The Implementation of SAK EP
May 5, 2021

A little sharing, currently there are 3 accounting standards that apply in Indonesia outside of the standard for Sharia, namely: SAK, SAK ETAP, and SAK EMKM. Beside SAK, Indonesian Institute of Accountants (IAI) allows entities in Indonesia to apply a simpler accounting standard by enacting SAK ETAP for entities with no significant public accountability and SAK EMKM for micro, small and medium enterprises.

Recently, IAI announced to replace SAK ETAP with SAK EP. This new accounting standard is planned to be effective starting January 1, 2025 and is allowed for early implementation starting January 1, 2022. Thus, this will be a new challenge for entities and auditors in Indonesia to start learning the implementation of SAK EP. Broadly speaking, the SAK EP (Draft) provides an option to use the fair value principle; and there is a change in the recognition, measurement, presentation and disclosure of several accounts. The new standard also requires presenting comprehensive profit/loss, attributable comprehensive income in the statement of equity changes, and providing an option to use the direct method in the operating cash flow statement.

Let’s start applying SAK EP!