Indonesia Accounting Standards vs IFRS for Singapore Companies

Imagine a Singapore company that opens a subsidiary in Jakarta. The local accountant delivers neat financial statements every year, and everyone feels comfortable. Then the group auditor asks for the Indonesian numbers in the parent’s format, and nothing lines up. Profit looks different, lease balances are missing, and the statements arrive in another language and currency. Nobody made a mistake. Two rulebooks simply speak two different dialects.

That gap sits at the heart of Indonesia accounting standards vs IFRS. Your Singapore parent most likely reports under a framework that matches IFRS, while your Indonesian company must follow Indonesian accounting standards issued by local bodies. In this guide, we explain the differences in plain language, show where adjustments happen, and give you a clear plan so your two finance teams stay in step.

Why Indonesian reporting can differ from Singapore

What is the difference between Indonesian accounting standards and IFRS?

Indonesian accounting standards, called SAK, draw on IFRS as a reference, yet most Indonesian companies do not apply IFRS word for word. The local rules have four tiers, effective dates that usually run about a year behind IFRS, and a few standards that have no IFRS twin. IFRS itself does not form part of Indonesian law.

The PSAK Indonesia series works as the practical rulebook. PSAK stands for Pernyataan Standar Akuntansi Keuangan, which means Statement of Financial Accounting Standards. The Financial Accounting Standards Board of the Institute of Indonesia Chartered Accountants (DSAK IAI) writes these standards, and laws such as the Limited Liability Companies Law recognise them. According to the IFRS Foundation’s profile for Indonesia, the country supports IFRS as the global goal, yet it still develops its own local standards along the way.

Singapore follows a different path. The Accounting Standards Council issues SFRS(I), and ACRA publishes them. These standards are equivalent to IFRS, and a company that applies them can also state that it complies with IFRS, as ACRA explains on its page for SFRS(I). The Companies Act requires Singapore companies to follow the accounting standards the council prescribes.

Why does this matter to a Singapore parent company?

Your parent’s consolidated accounts must show every subsidiary under one set of accounting policies. Your Indonesian company, however, must also produce local statutory accounts under Indonesian rules for its tax office, auditors, banks and regulators. As a result, one subsidiary often keeps two views of the same year: the local view and the group view. The more clearly you plan for both, the fewer surprises you face at year-end.

The four tiers of Indonesian accounting standards

Since 1 January 2024, SAK has had four tiers. Knowing which one your subsidiary uses is the first step in any subsidiary accounting review.

Sharia transactions follow separate standards from a different IAI board, and those standards apply to Tiers 2 to 4. For a closer look at the gap between the top two tiers, the IAI publishes a comparison of SAK Internasional and SAK Indonesia.

Indonesia accounting standards vs IFRS: where the numbers can differ

Differences show up in specific areas. The table below compares typical treatment under SAK EP, which follows the 2015 IFRS for SMEs, with full IFRS as your parent applies it through SFRS(I). Use it as a conversation starter, because SAK EP includes a few local changes and your accountant should confirm the final wording.

These examples show direction, not a complete list. Your accountants should map the full set against your parent’s policy manual.

Indonesia also has standards with no IFRS twin. For example, one local standard covers business combinations under common control, which matters when your group moves the Indonesian company between sister entities. In addition, Indonesian standards do not exempt any entity from preparing consolidated statements, so an Indonesian company that owns its own subsidiaries must consolidate them in its local accounts too.

Timing adds another wrinkle. Tier 2 standards generally take effect about a year after the matching IFRS. Therefore, if your parent adopts a new IFRS requirement early, the Indonesian statutory accounts may not follow in the same year.

Local financial statements and financial reporting in Indonesia

Local financial statements are the formal accounts your Indonesian company prepares for Indonesian law, tax and lenders. The table below shows the essentials of financial reporting Indonesia that every parent company should know.

You can find filing tools and guidance on the Directorate General of Taxes website, and investment reporting on the OSS portal. For more depth, see this doing business guide on Indonesian accounting standards.

How do you read an Indonesian financial statement set?

A full set of statements has five parts. Here are the English names beside their Indonesian titles, so you can find each part quickly.

A local team that handles financial reporting in Indonesia every month keeps these statements ready, which makes the later bridge to group figures much easier.

Reporting adjustments: turning local numbers into group numbers

What is a reporting bridge?

A reporting bridge is a set of adjusting entries and account mappings that converts a subsidiary’s local figures into the parent’s accounting policies and currency. It sits between the local books and the group consolidation, and it usually lives in a spreadsheet or in the group’s consolidation software. Three steps build it.

1. Match the policies. The consolidation standard, SFRS(I) 10, which mirrors IFRS 10, requires uniform accounting policies for similar transactions. It also requires statements that share the same reporting date, and when a subsidiary’s year-end differs, the gap cannot exceed three months. List each policy difference, and post a bridge entry for each one.
2. Translate the currency. SFRS(I) 1-21 sets the method. Translate assets and liabilities at the closing rate, and translate income and expenses at the rate on each transaction date. An average rate often works when rates stay steady. Record the resulting difference in other comprehensive income.
3. Match intercompany items. Loans, management fees, royalties and sales between Singapore and Indonesia must show the same amount on both sides. Then the consolidation removes them. Because the rupiah and Singapore dollar move daily, agree one source for exchange rates.

Because the bridge touches both sets of books, subsidiary accounting works best when one team owns the local ledger and understands the group policy manual. A provider that offers subsidiary accounting support in Indonesia and speaks the group’s language can shorten this step considerably.

Group consolidation with an Indonesian subsidiary

How does consolidation work for a Singapore parent with an Indonesian subsidiary?

Consolidation combines the parent’s accounts with those of every subsidiary, line by line, as if the group were one business. First, the team aligns policies and currency. Next, it adds assets, liabilities, income and expenses. Finally, it removes balances and transactions between group companies, and it cancels the parent’s investment against the subsidiary’s equity.

Follow this order each period:

1. Collect the Indonesian trial balance in rupiah, signed off by the local accountant.
2. Map each local account to the group chart of accounts.
3. Post the bridge entries for policy differences.
4. Translate the adjusted figures into the parent’s presentation currency.
5. Remove intercompany balances and the parent’s investment.
6. Review the result, and reconcile local profit and equity to group figures.

Size also matters for audits. ACRA’s small company rules look at the group a company belongs to, as its guidance on the small company audit exemption explains. As a result, the Indonesian figures can influence your parent’s audit position, even when the Singapore company looks small on its own.

What is PSAK 119, and could it help?

PSAK 119 is Indonesia’s version of IFRS 19. DSAK IAI issued it on 27 August 2025, and it applies to periods beginning on or after 1 January 2027, with earlier use allowed. It is voluntary, and it only reduces note disclosures for eligible subsidiaries without public accountability. Recognition and measurement stay under SAK Indonesia.

This matters for you, because SAK Indonesia sits closer to full IFRS than SAK EP does. Therefore, the standard may reduce the number of bridge entries while it trims the notes. Eligibility depends on the parent producing publicly available consolidated statements that comply with IFRS, so a privately held Singapore parent should check the conditions with its auditors first.

Why local accountants and the parent’s finance team must work together

Most reporting problems are not technical. They come from timing, unclear ownership and missing communication.

What goes wrong when the two teams work separately?

• The local accountant closes the books on the 20th, but the parent expects figures on the 10th.
• Each side codes the same expense to a different account, so totals disagree.
• Intercompany loans show different amounts because each side used a different exchange rate.
• The parent adopts a new accounting policy, and nobody tells Jakarta.
• Auditor questions arrive in two languages and reach the wrong person.

Who does what?

Five habits that keep subsidiary accounting smooth

• Share one calendar that shows close dates, package dates and audit dates for both countries.
• Keep one account map that links every local account to the group chart of accounts.
• Write a short policy summary in plain English, with a glossary of Indonesian terms.
• Confirm intercompany balances monthly, not only at year-end.
• Name one contact on each side, so questions never bounce between inboxes.

Many Singapore groups solve this by hiring accounting services in Indonesia from a provider that already understands group reporting. That way, the local ledger, the tax filings and the reporting package come from one team.

Your step-by-step action plan before year-end

Your 2026 year-end is about two months away. Work through these seven steps in order, and tick each one off.

Official sources you can open today

Need one team that speaks both Indonesian rules and group reporting?

Reading about standards helps, but having a partner on both sides of the border helps more. Bizsquare Accounting is a Singapore based firm with more than a decade of accounting and bookkeeping experience, backed by a local team in Indonesia that manages Indonesian compliance while keeping reporting structured for your group.

Through our accounting, tax and corporate secretary services in Indonesia, your subsidiary can receive:

•    Monthly bookkeeping and clear financial reports your Singapore team can read

•    Annual financial statements that support audits, banking and internal reporting

•    Corporate income tax (PPh Badan), VAT (PPN), withholding tax and payroll tax support

•    Corporate secretary support and ongoing compliance monitoring

With your 2026 year-end only two months away, now is a smart time to line up both teams. Tell us which standard your subsidiary uses today and how your parent reports, and we will walk you through what needs to match.

Get a Free Consultation with Bizsquare Accounting

Frequently asked questions

1.) Does Indonesia use IFRS?

Not directly. Indonesia uses its own standards, called SAK, which draw on IFRS. Tier 1, SAK Internasional, adopts IFRS in full, yet only certain listed companies may use it. Most other companies follow SAK Indonesia, SAK EP or SAK EMKM, so IFRS works as a reference and does not form part of Indonesian law.

2.) What is PSAK Indonesia?

PSAK stands for Pernyataan Standar Akuntansi Keuangan, or Statement of Financial Accounting Standards. The Financial Accounting Standards Board of the Institute of Indonesia Chartered Accountants (DSAK IAI) issues these standards. Each PSAK covers one topic, such as leases, revenue or financial instruments, and the series substantially follows IFRS with some local differences.

3.) What are the four tiers of Indonesian accounting standards?

Tier 1 is SAK Internasional, which adopts IFRS in full. Tier 2 is SAK Indonesia, which substantially converges with IFRS. Tier 3 is SAK EP, based on IFRS for SMEs and effective from 1 January 2025. Tier 4 is SAK EMKM, which serves micro, small and medium entities. Public accountability and size decide which tier applies.

4.) Which accounting standard does a PT PMA usually follow?

Most PT PMA companies have no public accountability, so they typically follow SAK EP. Some may choose SAK Indonesia, which sits closer to full IFRS. Your auditor can confirm the right tier, and the answer appears in the “basis of preparation” note of the latest financial statements.

5.) Can an Indonesian subsidiary file its local accounts under SFRS(I) or IFRS?

No. Local statutory accounts must follow Indonesian standards, because IFRS and SFRS(I) do not form part of Indonesian law. Your subsidiary can still send the parent a separate reporting package that follows group policies. That package supports consolidation, but it does not replace the local statements.

6.) Do Indonesian companies keep books in rupiah and Bahasa Indonesia, and can they use US dollars?

By default, yes. Accounting records use Bahasa Indonesia and rupiah. Qualifying companies, including many foreign owned ones, may apply to the tax office for approval to use English and US dollars, and the request must arrive at least three months before the financial year begins. The group package can still appear in English and Singapore dollars.

7.) When does an Indonesian company need a statutory audit?

A statutory audit applies once total assets or annual turnover reach IDR 50 billion, whether the owners are foreign or local. It also applies to companies that raise public funds, issue securities to the public or operate in certain regulated sectors. Banks and regulators may ask for audited figures earlier, so audit-ready books help.

8.) What is a reporting bridge?

A reporting bridge is a set of adjusting entries and account mappings that converts a subsidiary’s local figures into the parent’s accounting policies and currency. It sits between the local books and the group consolidation. Both teams should agree on it in writing, and the local accountant usually prepares the first draft.

9.) How do you translate rupiah into Singapore dollars for consolidation?

Under SFRS(I) 1-21, translate assets and liabilities at the closing rate, and translate income and expenses at the rate on each transaction date. An average rate often works as a practical shortcut when rates stay steady. Record the resulting difference in other comprehensive income, and agree one rate source in writing so both teams use the same numbers.

10.) What is PSAK 119 and should a subsidiary use it?

PSAK 119 is Indonesia’s version of IFRS 19. It lets eligible subsidiaries without public accountability give fewer note disclosures, and it applies to periods beginning on or after 1 January 2027. Because the choice is voluntary, ask your auditor whether your subsidiary qualifies and whether lighter notes justify the change.

11.) How long must accounting records stay on file in Indonesia?

Indonesian companies keep accounting records and supporting documents for at least 10 years. Because group auditors and tax reviewers can ask for old documents, store them in an organised system that both the local and parent teams can reach.

12.) When is the annual corporate income tax return due in Indonesia?

A company with a calendar financial year files its annual corporate income tax return by 30 April of the following year. Companies now file through the tax authority’s Coretax system. Because the return starts from the commercial accounts, errors in the books can flow straight into the tax figures.

13.) Why must the local accountant and the parent’s finance team coordinate?

Each team holds half of the picture. The local accountant knows Indonesian rules, deadlines and documents, while the parent’s team knows group policies and consolidation needs. When they share a calendar, an account map and one list of policy differences, year-end closes faster and auditors raise fewer questions.

14.) What happens if Indonesian figures do not match the group accounts?

Differences are normal, because the two sets of accounts follow different rules. Trouble starts when nobody can explain them. Keep a reconciliation that links local profit and equity to group figures, line by line, so auditors on both sides can follow the trail quickly.