Introduction to accounting in Indonesia.

Introduction to accounting in Indonesia

This guide will provide you with everything you need to know about accounting in Indonesia.

All companies must follow accounting requirements to illustrate the financial status of the company and track income and expenditure.

Let’s start.

What are the accounting standards in Indonesia?

The accounting standards in Indonesia is Indonesia Financial Accounting Standards (PSAK) issued by Indonesia Financial Accounting Standard Board (Dewan Standar Akuntansi Keuangan – DSAK) and the Indonesia Sharia Accounting Standards Board (Dewan Standar Akuntansi Syariah – DSAS) which are under the Indonesian Institute of Chartered Accountants (Ikatan Akuntan Indonesia – IAI).

Public and private Indonesian companies must act in accordance with the accounting standards issued by the DSAK-IAI and DSAS-IAI.

Four tiers of accounting principles in Indonesia

  1. Tier 1 – PSAK based IFRS is for domestic and foreign listed companies, and companies with public accountability. Effective on 1 January 2015, the Indonesia Financial Accounting Standard (SAK) has fully converged with the International Financial Reporting Standard (IFRS) as of 1 January 2014. The board commits to maintain a one-year gap. As a result, PSAK based IFRS will continually change following the IFRS updates.
  2. Tier 2 – PSAK Syariah is for companies which conduct their transactions using the Syariah principle, such as Bank Syariah and other Syariah Financial Institutions.
  3. Tier 3 – PSAK-ETAP is for entities without public accountability or entities with insignificant public accountability. The purpose of this standard is to provide convenience in presenting their financial statements.
  4. Tier 4 – PSAK EMKM is for micro, small and medium enterprise.

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When is the financial year-end for Indonesian companies?

The standard financial year-end for a company in Indonesia is the same as the calendar year, which is 1 January to 31 December. Financial statements should be submitted by 30 April of the following year.

If your company’s financial year is not the same as the calendar year, the reporting deadline is four months after the end of the financial year.

Financial statements should be submitted at the regional tax office, and if your annual turnover is more than IDR 50 billion or total assets is exceeding IDR 25 billion, the company’s financial statements must be audited.

Bookkeeping in Indonesia

Every company established in Indonesia must maintain their bookkeeping in the country.

Maintaining company books in Indonesia include:

  • Preparation of financial statement
  • Keeping all the accounting records and supporting documents such as sales invoice, vendor invoice, bank statement, agreements, contracts including tax document

All documents have to be kept for 10 years.

What are the annual financial statements for Indonesian companies?

Financial statements include:

  • Statement of financial position such as company assets, liabilities and owner’s equity
  • Profit loss statement and other comprehensive income – shows the company’s income, expenses and profit or losses during the year
  • Cash flow report – reports the company’s cash flow activities during the year
  • Statement of changes in company equity – reports on changes in equity during the year
  • Notes to the financial year – detailed descriptions the of items in the above reports.

It is required that the financial statements include the numbers from the previous years for comparison purposes. All accounting records must be in Bahasa Indonesian.

The financial statements must provide accurate information that is in accordance with the company’s activities and about the condition of the company.

What companies need to be audited?

Companies need to be audited by a public accountant registered in Indonesia if they meet one of the following requirements:

  • Companies that have total assets exceeding IDR 25 billion
  • Companies with annual gross turn over exceeding IDR 50 billion per year
  • Companies that issue debt acknowledgement instruments
  • Companies that are state-owned enterprises
  • Companies in the business sector that are related to the mobilisation of the public fund.
  • Publicly traded companies

Audits of Indonesian companies are based on the Indonesian Financial Accounting Standards (Standar Akuntansi Keuangan – SAK) which is determined by the DSAK-IAI and DSAS-IAI for sharia-based companies.

Who can be an auditor?

The auditor must be a registered and independent public accountant as specified by the Ministry of Finance. The Ministry of Finance does not permit a company to use auditing firm services for six consecutive years unless there have been changes to the company’s partners.

What is included in the audit report?

The audit report must state if the financial statements have been prepared according to the generally accepted accounting principles (GAAP). The auditor’s report must also include a statement of appointment regarding the financial statements.


Accounting is an important part of running a company in Indonesia, and you must always file and maintain financial statements accurately.

Acclime has a professional team of accountants who will take care of your company’s accounting. To ensure correct accounting, we recommend outsourcing Acclime’s accounting services.

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