Inney Silda Latifah

1410532040
Accounting Theory
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Financial Accounting Standards are the terms of reference in procedures relating to the
presentation of financial statements. Its existence is required to establish a common procedure in
explaining how financial statements are prepared and presented, thereby meaningful in terms of
language unity in analyzing financial reports for the company.

On the occasion This time I will discuss about the comparison of financial accounting standards that
have been used for a long time in Indonesia that we often call the PSAK with international standard
that is currently being discussed.

Before we discuss what is the difference between IFRS & SAK, of course We must first understand
what the definition of each standard of this financial statements

Understanding SAK

Financial Accounting Standards (SAK) is a framework in the procedure of making financial

statements in order to occur uniformity in the presentation of financial statements. Financial
Accounting Standards (SAK) is the result of the formulation of the Accounting Principles
Committee of Indonesia in 1994 replacing the Accounting Principles of Indonesia in 1984.
SAK in Indonesia is an application of several existing accounting standards such as IAS,
IFRS, ETAP, GAAP. In addition, there are also Sharia PSAK and also SAP.

In addition to the uniformity of financial statements, accounting standards are also required to
facilitate the preparation of financial statements, facilitate auditors and facilitate readers of
financial statements to interpret and compare the financial statements of different entities.

Understanding IFRS

IFRS is an international accounting standard issued by the International Accounting Standard

Board (IASB). The International Accounting Standards (IAS) are composed by four major
international organizations: the International Accounting Standards Board (IASB), the
European Commission (EC), the International Capital Market Organization (IOSOC), and the
International Accounting Federation (IFAC).

The International Accounting Standards Board (IASB), formerly known as the International
Accounting Standards Commission (AISC), is an independent institution to develop
accounting standards. The organization aims to develop and encourage the use of high
quality, understandable and comparable global accounting standards (Choi et al., 1999 in
Intan Immanuela, puslit2.petra.ac.id).

From the above explanation, there must be a very basic question that is, what is the difference
between the two standards of the financial statements, and here are some of the differences
that we can see.
SOURCE
BALANCE SHEET
Financial Performance
Income statement
Cash Flow Statements
(Formats and Methods)
Extraordinary Items
Presentation of recognized
gains and losses / other
Comprehensive Income
Presentation Result of
Associate Company
Significant Disclosure of the
Association
PSAK
PSAK No.1 ( Revisi 1998)
Requires presentation of
current assets and non-
current assets except for
certain industries such as
banks
Reports of Income
statement
is the same as IFRS.
However, there are
differences in details on
items presented on the
earnings received in advance
Same with IFRS but in some
entities must use the direct
method
Outstanding post items still
to be reported
Recognized for the gains and
losses presented in the
shareholders' equity change
statement
In particular does not require
the appointment of after-tax
stock results
Less disclosure compared to
IFRS. Significant information
on unnecessary assets,
liabilities, revenues and
outcomes
IFRS
Presentation of Financial
Statements IAS1,
Presentation is not current
assets or non-current assets,
only when the presentation
of liquidity is more relevant
and reliable for certain items
A comprehensive income
statement
There is no standard format
even though expenditures
must be presented by
selecting one of two formats
Standard post but provision
is limited to its contents.
Using the direct method or
indirect method
In IFRS is prohibited
Presents financial statements
that recognize gains and
losses in separate notes or
notes on changes in
shareholder equity
Using the equity method that
shows the after-tax stock
results
Provide detailed or
significant information on
assets, liabilities, revenues
and outcomes
Financial Statement management Unregulated
Responsibility

Components of Financial Balance Sheet, Income Statements of financial

Statements Statement, Cash Flow position, Income statement
Statement,