Which Accounting Standards Apply to PT PMA Companies in Indonesia?

A PT PMA prepares its Indonesian financial statements under the applicable pillar of Standar Akuntansi Keuangan (SAK), Indonesia’s financial accounting standards. The choice depends on the company’s public accountability, eligibility for a simplified framework, and any sector rules. Foreign ownership alone does not require full IFRS reporting.

Which Indonesian Accounting Framework Should a PT PMA Use?

A PT PMA is an Indonesian company with foreign investment. It follows Indonesian company reporting rules. Article 66 of Law No. 40 of 2007 requires the financial statements in a limited liability company’s annual report to be prepared under financial accounting standards.

The Indonesian Institute of Accountants (IAI) sets out four SAK pillars in its financial reporting framework. The company should assess its own status, reporting purpose, and any regulator requirements before selecting one.

IAI says SAK EP replaced the earlier SAK ETAP for periods beginning in 2025. A privately held PT PMA can consider SAK EP only after checking the standard’s criteria and applicable regulation. A regulated business may face additional reporting rules.

What Do PSAK and SAK Mean?

PSAK is short for Pernyataan Standar Akuntansi Keuangan, or Financial Accounting Standards Statements. SAK means Standar Akuntansi Keuangan, the broader financial accounting standards framework. IAI says SAK Indonesia comprises PSAK and ISAK, the corresponding interpretations.

The distinction matters when someone asks whether a PT PMA must be “PSAK compliant.” That phrase does not identify the reporting pillar or the individual standard that applies to a transaction. Start with the applicable SAK pillar, then identify relevant requirements within it.

How Do Indonesia Accounting Standards Compare With IFRS?

IAI describes SAK Indonesia as IFRS-converged, with some local PSAK and ISAK. It describes SAK Internasional as a separate pillar that fully adopts IFRS Accounting Standards. SAK EP draws on IFRS for SMEs but reflects Indonesian conditions. These are different frameworks, even when their treatments overlap.

For a PT PMA, a foreign parent’s use of IFRS does not automatically put its Indonesian subsidiary on SAK Internasional. The IFRS Foundation’s Indonesia jurisdiction profile also distinguishes Indonesia’s IFRS-converged national standards from its fully adopting international pillar.

Rather than asserting that every ledger entry must follow two standards, identify the local SAK basis first. If the parent needs an IFRS consolidation package, document any differences and prepare a reconciliation for group reporting. The local statements and the parent package serve different reporting purposes.

What Financial Statements and Records Must the Company Prepare?

Article 66 of the Company Law lists the financial statements included in the annual report: comparative year-end balance sheet information, an income statement, cash flow statement, statement of changes in equity, and notes. Our guide to preparing FY2026 financial statements for a PT PMA covers the close and supporting evidence.

Accounting standards, bookkeeping, and audit requirements answer different questions. The Directorate General of Taxes says corporate taxpayers must keep books and include financial statements with their annual income tax return. Taxable income may require a fiscal reconciliation from accounting profit.

An external audit depends on the triggers in Article 68 of the Company Law or another applicable requirement, not simply on foreign ownership. Our guide explains when a PT PMA needs audited financial statements. The audit decision should be made separately from the SAK pillar decision.

The directors also need an annual report for shareholder consideration. Read our guide to annual RUPS requirements for PT PMA for the approval process.

How Should a Foreign-Owned Company Handle Parent Reporting?

Ask the parent which financial year, reporting currency, chart of accounts, accounting policies, and intercompany schedules its consolidation process requires. Compare those instructions with the PT PMA’s Indonesian statutory reporting basis before the year-end close.

1. Confirm the local SAK pillar and the entity’s actual financial year-end.
2. Map the local trial balance to the parent reporting package without overwriting the local ledger.
3. List material policy, presentation, and currency differences for review by qualified accountants.
4. Reconcile intercompany balances and retain evidence for related-party transactions. Our guide to Indonesia’s transfer pricing rules addresses the separate tax dimension.
5. Record which version of the statements supports the local tax return, annual report, and group package.

That last step prevents a group adjustment from silently changing figures already sent to Indonesian tax or corporate reporting teams. Our overview of PT PMA tax obligations explains where financial records feed annual tax work. The Coretax compliance checklist for foreign-owned companies covers the filing handoff.

Use a Framework Decision Checklist Before Closing the Books

Before approving the reporting plan, confirm the entity’s public accountability, industry regulator, eligibility for SAK EP or EMKM, and the needs of external statement users. Then document the chosen pillar, relevant standards, the audit assessment, and any parent reporting adjustments.

For practical support with bookkeeping, financial statements, and tax reporting, review Indonesia Accounting and Tax Reporting Services. Define the deliverables and review responsibilities for the PT PMA’s circumstances before engaging support.