Accounting standards and compliance requirements for businesses in Indonesia.

Accounting in Indonesia operates within a structured and tiered framework designed to address the diverse needs of businesses, from multinational corporations to micro and small enterprises. Compliance with the Indonesia Financial Accounting Standards (PSAK) is mandatory, encompassing requirements for financial statement preparation, bookkeeping, reporting deadlines and audits.

This guide provides a clear overview of accounting in Indonesia, covering the four-tier PSAK system, bookkeeping obligations, components of annual financial statements, audit requirements, financial year-end and shareholder approval deadlines.

Accounting standards framework in Indonesia

Indonesian accounting standards are established and maintained by two primary bodies operating under the Indonesian Institute of Chartered Accountants (Ikatan Akuntan Indonesia, or IAI).

• Indonesia Financial Accounting Standards Board (DSAK) issues the Indonesian Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan, or PSAK), which apply to conventional business entities.
• Indonesia Sharia Accounting Standards Board (DSAS) develops accounting standards for entities operating in accordance with Islamic finance principles.

Both public and private Indonesian companies apply the accounting standards issued by DSAK-IAI or DSAS-IAI depending on their business model and the nature of their transactions.

What are the four PSAK frameworks?

Indonesia applies a tiered accounting framework to reflect the different reporting needs, levels of public accountability and operational complexity of various entity types.

The four primary PSAK tiers are summarised below:

For a detailed explanation of the scope for each framework, refer to our comprehensive guide on Indonesia’s PSAK standards.

Bookkeeping requirements in Indonesia

Every company established in Indonesia maintains its bookkeeping within the country, ensuring that financial records remain accessible to local authorities for tax audits or compliance reviews.

Scope of bookkeeping obligations

Bookkeeping includes preparing financial statements and retaining all accounting records and supporting documents. These include sales invoices, vendor invoices, bank statements, agreements, contracts, and tax documents. Companies should retain these documents for 10 years to support regulatory reviews and respond to queries about historical transactions or compliance matters.

This retention period runs from the end of the relevant tax year, not the date of each document, and covers tax records such as returns and payment receipts alongside standard commercial documents.

Currency requirements

All accounting records need to be maintained in Indonesian Rupiah by default. Certain entities, including PT PMA companies, subsidiaries of foreign companies and taxpayers listed overseas, can apply to the Directorate General of Taxes (DGT) for approval to use USD reporting currency. The application must be submitted at least three months before the relevant fiscal year begins and is deemed approved if the DGT does not respond within the statutory period.

Failure to comply may result in the DGT issuing a tax assessment where bookkeeping is not properly maintained. Intentional breaches, such as not keeping required records or falsifying them, can lead to criminal penalties.

Components of annual financial statements

Indonesian companies prepare a comprehensive set of financial statements covering their financial position and performance. Statements include comparative figures from previous years, allowing stakeholders to assess financial performance and position over time. They must accurately reflect the company’s activities and financial position, ensuring transparency and accountability.

The full set includes:

• Statement of financial position (balance sheet): presents the company’s assets, liabilities and owner’s equity as of the reporting date, giving stakeholders visibility into resources, obligations and net worth at a specific point in time.
• Profit and loss statement and other comprehensive income: show income, expenses and resulting profit or loss during the year, capturing the operational performance behind changes in financial position.
• Cash flow report: documents cash flow activities during the year, categorised into operating, investing and financing activities, complementing the accrual-based view in the profit and loss statement.
• Statement of changes in equity: shows how profits, losses, capital contributions and distributions affect ownership interest, bridging opening and closing equity balances.
• Notes to the financial statements: provide detailed descriptions of items in the statements above, explaining accounting policies and breaking down aggregated figures for proper interpretation.

Audit requirements and procedures in Indonesia

Not all Indonesian companies face mandatory audit requirements, but specific thresholds and business characteristics trigger the obligation to engage a registered public accountant.

Statutory and sector-based audit triggers

Indonesia’s audit requirements rest on two distinct legal bases and should be considered independently.

The first is the statutory audit obligation under the Company Law, which applies based on a company’s size or business activities. A company triggers this obligation if it meets any one of the following: total assets or annual gross turnover exceeding IDR 50 billion, the issuance of debt acknowledgement instruments, business activities involving the mobilisation of public funds, or status as a publicly listed company. For foreign-owned companies (PT PMA), the asset or turnover threshold is usually the most relevant trigger, and it applies once either threshold is exceeded.

The second applies independently of these thresholds. The Financial Services Authority (OJK) imposes mandatory annual audits on regulated sectors regardless of size. This includes banks, multifinance companies, insurance companies, other OJK-regulated entities and capital market participants such as investment managers and securities companies. OJK-regulated entities must undergo an audit regardless of whether they exceed the IDR 50 billion threshold.

Auditor qualifications and rotation requirements

Auditors should be registered and independent public accountants as specified by the Ministry of Finance. Independence requirements help ensure objective and unbiased assessments of financial statements.

OJK requires the public accountant (the individual signing partner) auditing the listed and OJK-regulated entities to rotate after three consecutive years, followed by a two-year cooling-off period before that individual can resume the engagement. This rotation applies to the public accountant personally, so a company can retain the same audit firm provided a different accountant leads the engagement.

Audit standards and reporting

Audits of Indonesian companies are based on the Standards of Auditing established by the Indonesian Institute of Certified Public Accountants (IAPI). These standards establish the criteria against which financial statements are evaluated and provide the benchmark for determining whether accounts present a true and fair view.

The resulting audit report states whether the financial statements have been prepared in accordance with the PSAK. It also includes a statement of appointment regarding the financial statements, clarifying the auditor’s role and responsibilities in relation to the financial information presented.

Financial year-end and reporting deadlines

The standard financial year for Indonesian companies follows the calendar year, from 1 January to 31 December. However, a foreign company may have a different financial year if they are following their holding company. Companies using the standard financial year need to submit their annual tax return by 30 April of the following year. Seeking professional tax compliance support can help companies manage preparation and filing requirements efficiently.

Companies that adopt alternative financial years face a reporting deadline four months after their financial year-end. This four-month window allows companies to close their accounts, prepare financial statements, and, where necessary, complete audit procedures. A detailed overview of these timelines and obligations is available in our guide on financial year-end requirements.

Shareholder approval of annual financial statements

Before financial statements are used for tax filing, they need formal shareholder approval. Companies convene an Annual General Meeting of Shareholders (AGMS) within six months of the financial year-end to approve the annual report and financial statements. Evidence of this approval, formalised in a notarial deed, needs to be submitted to the Ministry of Law through its electronic system within 30 business days of the deed’s execution. Missing either deadline can result in administrative sanctions, including restricted access to the Ministry’s filing system. Separately, financial statements are submitted to the regional tax office serving the company’s location.

Conclusion

Indonesia’s accounting framework operates under a structured PSAK system, matching reporting complexity to each entity’s size and public accountability. Meeting its requirements means confirming the applicable PSAK tier, tracking financial year-end and AGMS deadlines, maintaining compliant bookkeeping, and checking both Company Law and OJK audit triggers independently.

Getting these processes right from the start reduces the risk of missed deadlines and compliance penalties. Where a business’s obligations are unclear, the right support can help apply these requirements to its specific circumstances.

How Acclime can help with accounting compliance in Indonesia

Acclime provides comprehensive accounting services for companies operating in Indonesia. Our team of professional accountants manages financial statement preparation, maintains bookkeeping in compliance, ensures proper document retention and coordinates with registered auditors when audit requirements apply.

Contact Acclime to discuss how our accounting services can help your company maintain accurate financial records and meet all regulatory obligations.