New Amendments Will Clarify Debts and Liabilities as Current or Non-current
Handling business financial matters is not a fun task. But the preparation of consolidated accounts in Indonesia is easy when you work with 3E Accounting.
What is Consolidated Financial Statements in Indonesia
Under the Statement of Financial Accounting Standards (PSAK) 65, PSAK 65 consolidated financial statements will replace the old PSAK 4. The PSAK 4 involved a business having to prepare both consolidated and separate financial statements.
Consolidated statements are necessary if you have subsidiary companies. The statements should combine the financial records of both parent and subsidiaries as a single entity.
With the PSAK 65, it could potentially affect all reporting entities (investors included). It is best to consult a professional service like 3E Accounting to assess and understand the context of your business and its needs.
Your consolidated financial statements must be prepared per the International Financial Accounting Standards (IFAS) requirements. It is like Indonesia’s GAAP system. The IFAS standards ensure best industry practices are always maintained for listed companies in Indonesia.
Why Preparation of Consolidated Accounts in Indonesia is Necessary
Consolidated financial statements have a purpose. They represent a true and accurate picture of a company’s financial position. The owners and the creditors are the ones who benefit from this. It is much easier to see how the business is performing financially when you have an overall view.
During the preparation of consolidated accounts in Indonesia, your statements must include disclosures required by IFAS. These requirements are from 2018. You must also include all your subsidiaries in the statements. Exemptions are only applicable if:
- Control is temporary because the subsidiary will be disposed of in the future
- The subsidiary is operating under long-term conditions that are severely restricted and affect its ability to transfer funds to the parent company.
Parent companies don’t need to present their consolidated financial statements if:
- The parent company is a wholly-owned subsidiary itself
- The parent company is a partially-owned subsidiary
- No objections are made to the parent company presenting their financial statements
Need Some Help?
We’re here to guide you through the accounting and reporting process. For more information on our services for the preparation of consolidated accounts in Indonesia, contact our team today.