Indonesia Issued Standard for Non-Public Entities and Standard for Shariá Transaction on July 17th 2009.

The Indonesian Institute of Accountants (IAI) officially issued Accounting Standard for Non-Public Accountability Entities and Standard for Shariá Transaction on July 17th at the City of Malang, East Java. Standard for Shariá Accounting was released in three different languages: Indonesian, English and Arabic.

“Indonesia as the largest muslim country in the world should become an example for the development of high quality sharia accounting standard. We believe that our standard is a high quality standard and we hope that these standard can be useful for other countries as well. That is one of the reason we publish it in three different languages. We are also one of earliest country in the world that launched accounting standard for non-public entities or similar with accounting standard for SME.” Said Ahmadi Hadibroto, IAI President.

The standards were launched at the national accounting seminar at Brawijaya University. Presented at the launching were Deputy Governor of Bank Indonesia, Mr.Muliaman Hadad as well as representation from Bapepam (Capital Market Supervisory Agency), representation from KADIN (Indonesian Chamber of Commerce and Industry ), and also members of Financial Accounting Standards Board (DSAK).

“The standard for non-public entities will support small and medium enterprises in making good quality financial statements without the complexity of IFRS that we are adopting for the general accounting standards. Some of IFRS requirements are to complex for SME to comply with, this standard has less complexity, especially in measurement and disclosure requirements compare to IFRS. This standard is very important as most of the business entities in Indonesia are SME. ” said Jusuf Wibisana, chairman of Indonesian Accounting Standard Board. The standard for private entities, or in Indonesian term SAK-ETAP (Standar Akuntansi Keuangan untuk Entitas Tanpa Akuntabilitas Publik), is developed based on IFRS for SME developed by IASB, although not from the earliest version recently issued by IASB. SAK-ETAP is to be effective per 1 January 2011, however early adoption in 2010 is allowed.

With the issuance of these two standards, currently Indonesia has three accounting standards which are: the Financial Accounting Standard (PSAK), Accounting Standard for Non-Public Entities (SAK-ETAP) and Statement of Financial Accounting Standard for Shariah Transaction (SAK-Syariáh).