Frequently Asked Questions: #psak

Okusi Associates can provide valuable assistance in resolving complex technical accounting issues for PMA companies in Indonesia through the following services:

• Expert Accounting Team: Okusi Associates employs experienced Indonesian CPAs who are well-versed in both Indonesian Accounting Standards (PSAK) and International Financial Reporting Standards (IFRS).

• Tailored Solutions: The firm offers customized accounting solutions to address specific technical challenges faced by PMA companies, taking into account the unique aspects of Indonesian regulations and international best practices.

• Compliance Assurance: Okusi Associates ensures that financial statements and accounting practices comply with Indonesian regulations, helping companies avoid potential legal and financial risks.

• Technical Consultations: The firm provides in-depth consultations on complex accounting matters, offering guidance on proper treatment of transactions, asset valuations, and financial reporting.

• Industry-Specific Expertise: With experience across various sectors, Okusi Associates can address industry-specific accounting challenges and provide relevant insights.

• Liaison with Regulatory Bodies: When necessary, the firm can communicate with Indonesian regulatory authorities to clarify complex accounting issues or seek official guidance.

• Audit Support: For companies undergoing audits, Okusi Associates can assist in preparing documentation, explaining complex transactions, and addressing auditor queries.

• Financial Statement Preparation: The firm can help in preparing comprehensive financial statements that adhere to both local and international standards, ensuring accuracy and compliance.

• Accounting System Optimization: Okusi Associates can review and optimize accounting systems to better handle complex transactions and reporting requirements.

• Training and Knowledge Transfer: The firm can provide training to in-house accounting teams on handling complex technical issues, enhancing their capabilities.

• Continuous Updates: Okusi Associates keeps clients informed about changes in accounting standards and regulations that may impact their financial reporting.

By leveraging these services, PMA companies can effectively navigate and resolve complex technical accounting issues, ensuring accurate financial reporting and compliance with Indonesian regulations.

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Financial reporting requirements for companies in Indonesia are governed by various regulations and standards. Here's an overview of the key regulatory requirements:

Applicable Regulations:

• Indonesian Financial Accounting Standards (PSAK)
• Law No. 40 of 2007 on Limited Liability Companies
• Capital Market and Financial Institution Supervisory Agency (OJK) regulations for public companies

Key Requirements:

• Annual Financial Statements: Companies must prepare annual financial statements consisting of:

  • Balance sheet
  • Income statement
  • Cash flow statement
  • Statement of changes in equity
  • Notes to the financial statements

• Accounting Standards: Financial statements must be prepared in accordance with Indonesian Financial Accounting Standards (PSAK), which are largely aligned with International Financial Reporting Standards (IFRS).

• Language and Currency: Financial statements should be prepared in Indonesian language and presented in Indonesian Rupiah (IDR).

• Filing Deadlines:

  • Private companies: Within 6 months after the end of the financial year
  • Public companies: Within 4 months after the end of the financial year

• Audit Requirements:

  • Public companies: Annual financial statements must be audited by a registered public accountant
  • Private companies: Audit requirements depend on company size and other factors (e.g., total assets, annual turnover)

• Board of Directors' Report: Companies must prepare an annual report of the Board of Directors, providing an overview of the company's performance and future plans.

• Consolidated Financial Statements: Required for companies with subsidiaries, presenting the financial position and results of the entire group.

• Specific Industry Requirements: Certain industries (e.g., banking, insurance) may have additional reporting requirements set by their respective regulatory bodies.

• Tax Reporting: Companies must submit annual corporate income tax returns, which should be based on the audited financial statements.

Additional Considerations:

• Companies may need to maintain their accounting records for a minimum of 10 years.
• Foreign-owned companies (PMA) may have additional reporting requirements to the Investment Coordinating Board (BKPM).
• Publicly listed companies are subject to more stringent reporting and disclosure requirements set by the OJK and Indonesia Stock Exchange (IDX).

It's important to consult with qualified professionals or refer to the latest regulations for the most up-to-date and specific requirements applicable to your company's situation.

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Okusi Associates can provide valuable assistance in harmonizing accounting policies following an acquisition in several ways:

• Review of Existing Policies: Conduct a thorough review of the accounting policies of both the acquiring company and the acquired entity to identify differences and areas requiring harmonization.

• Gap Analysis: Perform a detailed gap analysis to highlight discrepancies between the two sets of accounting policies and practices.

• Policy Development: Assist in developing new, unified accounting policies that comply with Indonesian Accounting Standards (PSAK) and align with the parent company's global standards if applicable.

• Implementation Plan: Create a comprehensive implementation plan for rolling out the harmonized accounting policies across the merged entity.

• Staff Training: Provide training sessions for accounting and finance staff to ensure proper understanding and application of the new harmonized policies.

• System Integration: Advise on necessary changes to accounting systems and processes to support the harmonized policies.

• Compliance Assurance: Ensure that the harmonized policies meet all relevant regulatory requirements and accounting standards in Indonesia.

• Documentation: Assist in documenting the new policies and procedures for future reference and audit purposes.

• Transition Support: Offer ongoing support during the transition period to address any issues or questions that arise.

• Audit Preparation: Help prepare the company for its first post-acquisition audit under the new harmonized policies.

• Reporting Alignment: Ensure that financial reporting processes are aligned with the new policies to provide consistent and accurate information to stakeholders.

By leveraging Okusi Associates' expertise in Indonesian accounting standards and practices, companies can ensure a smooth transition to harmonized accounting policies, maintaining compliance and improving financial reporting consistency across the newly merged entity.

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Okusi Associates ensures compliance with Indonesian Generally Accepted Accounting Principles (GAAP) through several key practices:

• Employing qualified Indonesian CPAs who are well-versed in local accounting standards
• Staying up-to-date with the latest changes in Indonesian financial regulations and GAAP
• Implementing rigorous internal quality control processes
• Utilizing specialized accounting software tailored for Indonesian GAAP compliance
• Providing ongoing training and professional development for staff
• Conducting regular internal audits to ensure adherence to GAAP standards
• Collaborating with regulatory bodies and professional associations to maintain best practices
• Offering comprehensive accounting and financial reporting services that align with Indonesian GAAP requirements
• Assisting clients in preparing financial statements that meet local regulatory standards
• Providing guidance on proper documentation and record-keeping to support GAAP compliance

By following these practices, Okusi Associates helps ensure that their clients' financial statements and accounting processes are fully compliant with Indonesian GAAP, reducing the risk of regulatory issues and providing accurate financial information for decision-making and reporting purposes.

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PMA companies in Indonesia are required to prepare and submit annual financial statements to the Indonesian Tax Office. Here are the key requirements:

Preparation of Financial Statements:

• Financial statements must be prepared in accordance with Indonesian Financial Accounting Standards (SAK).
• The statements should include:
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Statement of Changes in Equity
  • Notes to the Financial Statements

Submission Requirements:

• Deadline: Annual financial statements must be submitted along with the Annual Corporate Income Tax Return (SPT Tahunan PPh Badan) by the end of the fourth month after the end of the fiscal year.
• Language: Financial statements should be prepared in Indonesian language.
• Currency: The statements should use Indonesian Rupiah (IDR) as the reporting currency.

Additional Requirements:

• For companies with gross revenue exceeding IDR 50 billion per year, the financial statements must be audited by a certified public accountant.
• Companies listed on the Indonesian Stock Exchange have additional reporting requirements set by the Financial Services Authority (OJK).

Supporting Documents:

• Trial Balance
• General Ledger
• Sub-ledgers for major accounts
• Bank statements and reconciliations
• Fixed asset register
• Inventory list (if applicable)

Electronic Submission:

• The Indonesian Tax Office has implemented an e-Filing system for tax returns and financial statements.
• Companies are required to submit their financial statements electronically through this system.

Penalties:

• Failure to submit financial statements or submitting incomplete/inaccurate statements can result in penalties, including fines and potential tax audits.

It's important to note that the specific requirements may vary depending on the company's size, industry, and other factors. Engaging with a professional accounting firm or tax consultant familiar with Indonesian regulations is highly recommended to ensure full compliance and accurate reporting.

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The General Ledger is a crucial component of a company's financial record-keeping system. Here's an overview of how it's maintained and its key components:

Maintenance of the General Ledger

• The General Ledger is typically maintained using accounting software, which automates many of the processes involved.
• Transactions are recorded in chronological order and categorized into appropriate accounts.
• Regular reconciliations are performed to ensure accuracy and detect any discrepancies.
• The ledger is updated in real-time or at regular intervals, depending on the system used.

Key Components of the General Ledger

• Chart of Accounts: This is a structured list of all accounts used by the company, including:

  • Asset accounts
  • Liability accounts
  • Equity accounts
  • Revenue accounts
  • Expense accounts

• Journal Entries: These record all financial transactions, including:

  • Date of the transaction
  • Accounts affected
  • Amounts debited or credited
  • Brief description of the transaction

• Account Balances: Running totals for each account in the chart of accounts.

• Trial Balance: A report that lists all accounts and their balances to ensure debits equal credits.

• Financial Statements: The General Ledger data is used to generate:

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement

• Subsidiary Ledgers: Detailed records for specific accounts, such as:

  • Accounts Receivable ledger
  • Accounts Payable ledger
  • Inventory ledger

• Audit Trail: A chronological record of all transactions and changes made to the ledger.

Additional Considerations for Indonesian PMA Companies

• The General Ledger must comply with Indonesian Financial Accounting Standards (SAK).
• It should be maintained in Indonesian Rupiah (IDR) as the functional currency.
• Regular reporting to Indonesian tax authorities is required, so the ledger should facilitate easy extraction of relevant data.
• For companies with foreign ownership, additional records may be needed to track capital investments and profit repatriation.

Maintaining an accurate and up-to-date General Ledger is essential for financial reporting, tax compliance, and informed decision-making. It's advisable to work with qualified accountants familiar with Indonesian regulations to ensure proper maintenance and reporting.

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