Financial Statement Presentation Standards for Tax Consultant Client Companies
Financial-statement presentation standards are basic knowledge often missed by tax-consultant clients — yet with material implications for tax compliance and business decisions. Understanding which standard applies to which situation is foundational competence worth mastering early.
Three main standards in Indonesia
1. SAK Umum (PSAK-based)
SAK Umum refers to the Financial Accounting Standards (PSAK) issued by IAI. Most PSAKs have adopted IFRS — so SAK Umum financial statements are readable by international investors. SAK Umum is mandatory for: public companies, state-owned enterprises, and companies with significant public accountability.
2. SAK ETAP (Entities Without Public Accountability)
SAK ETAP is the simplified version for entities without public accountability. The rules are lighter — no PSAK 73 (leases) or PSAK 71 (financial instruments) in their complex form. Most SMEs and family businesses use SAK ETAP.
3. SAK EMKM (Micro, Small, and Medium Entities)
SAK EMKM is the simplest version for MSMEs whose scale doesn't need SAK ETAP. If your business is micro-scale with simple transactions, SAK EMKM is sufficient.
Implications for tax reporting
Commercial financial statements (per SAK) differ from fiscal reports (per the Tax Law). But both are connected through fiscal reconciliation. A few differences:
- Commercial depreciation vs fiscal depreciation (commercial is usually more varied).
- Entertainment expense (commercial: expense; fiscal: positive correction without a nominative list).
- Doubtful-debt provisions (commercial: estimation; fiscal: only when actually written off).
- Income from government grants (commercial: can be deferred; fiscal: generally immediate income).
Choosing the right standard
Choosing a standard too complex for the business scale creates disproportionate compliance cost. Choosing one too simple can become a barrier when bank credit or material-transaction audit is needed.
Good tax consultants don't just ensure tax reports comply — they also guide clients to choose the right accounting standard from the start. An investment that pays for itself as the client grows.