Accounting Standards in Indonesia: Which One Your Company Uses
Accounting standards in Indonesia: full SAK, SAK EP and SAK EMKM, which one a PT or PT PMA may use, and what replaced SAK ETAP from 2025.
References (9)
- UU No. 40 Tahun 2007 (the Company Law), in force 16 August 2007. Article 66(3) and its elucidation require financial statements to follow the standards set by the recognised accounting profession body. Article 68(1) sets the grounds for a statutory audit.
- Kerangka Standar Pelaporan Keuangan Indonesia (KSPKI), approved by the IAI standards board on 12 December 2022. It has applied since 1 January 2024 and sets the tiers of Indonesian accounting standards and who may use each.
- SAK Entitas Privat (SAK EP), approved on 30 June 2021 and in force from 1 January 2025. It replaced SAK ETAP.
- SAK EMKM, in force for financial years beginning on or after 1 January 2018. Paragraph 1.2 defines who may use it. Paragraph 17.10 moves an entity that stops qualifying to another standard. Basis for conclusions DK12 covers a newly established entity.
- UU No. 20 Tahun 2008 on micro, small and medium enterprises. Article 1 excludes a business owned or controlled by a medium or large business, and defines large businesses to include foreign ones active in Indonesia.
- POJK No. 14/POJK.04/2022, in force 22 August 2022. Article 15 governs the periodic financial statements of listed and public companies.
- SEOJK No. 21/SEOJK.03/2024, in force 1 January 2025. It records that SAK ETAP ceased to apply on that date.
- UU No. 6 Tahun 1983 on tax administration (KUP), as amended by UU No. 28 Tahun 2007. Article 4(4), what goes with the annual return.
- PER-11/PJ/2025. Article 85(1)(b) sets the fiscal reconciliation filed with the corporate return.
Every PT (Perseroan Terbatas, a limited liability company) must prepare its financial statements under the accounting standards Indonesia recognises. The Company Law does not say which one (Company Law, UU 40/2007, Article 66(3)). Its elucidation points to the standards set by the country’s recognised accounting profession body, the Indonesian Institute of Accountants (IAI). Three are open to an ordinary company, and most private PTs and PT PMAs — foreign-owned limited companies — may use the middle one, SAK EP (Entitas Privat, for private entities).
Settling which standard applies is part of the bookkeeping we do, so it is not a question you need to work through alone.
The accounting standards Indonesia recognises
The IAI’s framework of standards (KSPKI, Kerangka Standar Pelaporan Keuangan Indonesia) has set four tiers since 1 January 2024. The top tier, SAK Internasional, adopts International Financial Reporting Standards (IFRS) word for word and is not an option for a private company. The other three are SAK (Standar Akuntansi Keuangan) standards, compared below from the IAI’s own summary of who may use each. Full SAK is the set also called SAK Indonesia, and SAK EMKM stands for Entitas Mikro, Kecil, dan Menengah, micro, small and medium entities.
| Full SAK | SAK EP | SAK EMKM | |
|---|---|---|---|
| Based on | IFRS, converged | IFRS for SMEs | Simplified, historical cost |
| Who must | Publicly accountable companies, unless their regulator allows lower | Nobody | Nobody |
| Who may | Any company | Any company without public accountability | Stand-alone micro, small and medium businesses |
| In force | As a tier since 2024 | 1 January 2025 | 1 January 2018 |
IFRS for SMEs is the international standard for small and medium-sized entities that SAK EP adapts.
Which one applies to your company
Three questions settle it, in this order.
- Is the company publicly accountable? It is if its shares or bonds trade on a public market, or if holding other people’s money is its main business, as with a bank, an insurer or a fund. Taking deposits in passing, as a travel agent does, does not count. These companies follow the rules of their regulator, the Financial Services Authority (OJK) (POJK 14/POJK.04/2022, Article 15).
- Is it a genuinely stand-alone small business? SAK EMKM is for a business that meets the legal definition of a micro, small or medium enterprise for two years in a row (SAK EMKM, paragraph 1.2).
- If neither, SAK EP is the floor. A company that is not publicly accountable and does not qualify for SAK EMKM uses SAK EP. The lower tiers are permissions rather than duties, so full SAK stays open to every company (IAI, KSPKI).
What people often get wrong
SAK ETAP has been replaced
Financial years from 2025
SAK ETAP, the standard for entities without public accountability, stopped applying on 1 January 2025. SAK EP, approved on 30 June 2021 and based on IFRS for SMEs, took its place (IAI, SAK EP; SEOJK 21/SEOJK.03/2024). At the lower end, a company that outgrows SAK EMKM must adopt another standard and cannot return to it (SAK EMKM, paragraph 17.10).
SAK EP is fuller than the standard it replaced. It brings in fair value for investment property, deferred tax and more detailed rules on financial assets and liabilities, while staying lighter than full SAK, with fewer disclosures (IAI, approval notice for SAK EP). For a company that kept SAK ETAP accounts, the change shows up in the accounts for 2025 onwards.
Accounts, audit and tax
Whether the accounts must also be audited turns on a different test: the grounds in Article 68(1) of the Company Law, chiefly assets or turnover of IDR 50 billion. Those grounds are set out in who has to be audited, and when. Where one applies, the external audit gives its opinion on the accounts in the standard the company has adopted.
Tax starts from the same accounts. The annual return carries the balance sheet and profit and loss statement (KUP, Article 4(4)). The company files a fiscal reconciliation with it, adjusting the accounting profit to taxable income (PER-11/PJ/2025, Article 85(1)(b)). How that fits the year end is covered in filing the corporate tax return.
Questions people ask
Does the Company Law name a particular standard?
Can we choose full SAK even though SAK EP is allowed?
Does a new company have to wait two years for SAK EMKM?
What this means for you
For most private companies, foreign-owned or local, the real choice is between SAK EP and full SAK. It is best made when the books are first set up, and revisited if the company’s size or ownership changes.
We make that call with you as part of your bookkeeping, and we prepare accounts under full SAK and under the simpler standards alike, so the standard follows your company rather than the other way round.