Financial reporting environment in Indonesia has been receiving greater scrutiny than ever before, to gradually align the Indonesian Financial Accounting Standards (IFAS)/Pernyataan Standar Akuntansi Keuangan (PSAK) with the International Financial Reporting Standards (IFRS). IFAS/PSAK has been changing continually for at least the past five years, and will continue to evolve in the years to come. The wide implications of these changes have created new challenges for corporate management. Compliance with the standards, adjustments of the accounting information system, adequate knowledgeable resources, impacts of expected earnings to report, possible changes made to financial ratios related to borrowing covenants, and linkage with taxation are among the issues that could follow from the significant changes in the accounting standards.
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