PSAK in Focus -The New PSAK Standards

Indonesia Audit Advisory
February 2014
PSAK in Focus
The New PSAK Standards
Keeping you informed
Contents
Introduction
New accounting standards and
amendments mandatorily effective for
years beginning 1 January 2014
New accounting standards and
amendments mandatorily effective for
years beginning 1 January 2015
Exposure Drafts (EDs) relating to
standards and interpretation proposed to
be applicable starting 1 January 2015
For more information
please see the following websites:
www.deloitte.com/id
www.iaiglobal.or.id
Introduction
The year 2014 is marked with the implementation of a number of new accounting
standards and amendments which has been officially published by Dewan
Standar Akuntansi Syariah – Institut Akuntansi Indonesia (DSAS- IAI) and
Dewan Standar Akuntansi Keuangan – Institut Akuntansi Indonesia (DSAK – IAI)
in 2013. These new standards and amendments to standards includes:
 PSAK 102 (r2013), Accounting for Murabahah
 ISAK 27, Transfers of Assets from Customers
 ISAK 28, Extinguishing Financial Liabilities with Equity Instruments
 ISAK 29, Stripping Costs in the Production Phase of a Surface Mine
 PPSAK 12, Withdrawal of PSAK 33 (Stripping Cost Activity and
Environmental Management in the Public Mining)
 PSAK 1 (r2013), Presentation of Financial Statements
 PSAK 4 (r2013), Separate Financial Statements
 PSAK 15 (r2013), Investments in Associates and Joint Ventures
 PSAK 24 (r2013), Employee Benefits
 PSAK 65, Consolidated Financial Statements
 PSAK 66, Joint Arrangements
 PSAK 67, Disclosures of Interests in Other Entities
 PSAK 68, Fair Value Measurement
Additionally DSAK – IAI also issued the following Exposure Drafts (EDs) for
public comments:
 ED PSAK 46 (r2013), Income Taxes
 ED PSAK 48 (r2013), Impairment of Assets
 ED PSAK 50 (r2013), Financial Instruments: Presentation
 ED PSAK 55 (r2013), Financial Instruments: Recognition and Measurement
 ED PSAK 60 (r2013), Financial Instruments: Disclosure
 ED ISAK 26, Reassessment of Embedded Derivatives

PSAK In Focus: The New PSAK Standards | 1
New accounting standards and amendments
mandatorily effective for periods beginning
on or after 1 January 2014
PSAK 102 (r2013), Accounting for Murabahah
Significant Issues
The differences between the prior and current standard are as
follows:
1. Types of murabahah transactions – Under PSAK 102,
entities should analyse and make an assessment for all its
transaction to determine the category and the applicable
standards to be used.
2. Revenue recognition method
 Recognised using the risk and reward analysis under
PSAK 102 for Murabahah categorised as a buy-sell
activity; and
 Recognised using the effective rate method under
PSAK 55 for Murabahah categorised as a financing
activity
Effective Date
PSAK 102 (r2013) will be effective on or after 1 January 2014
and apply prospectively.
ISAK 27, Transfer of Assets from Customers
Significant Issues
Is the definition of an asset met? – The entity receiving the
item of property, plant and equipment recognizes it in its
statement of financial position when it meets the definition of an
asset under the Presentation of Financial Statements.
How should the transferred asset be measured at initial
recognition? – Where an entity determines that the item of
property, plant and equipment qualifies for recognition as an
asset, the Interpretation requires the entity to recognize the
asset in accordance with PSAK 16 Property, Plant and
Equipment.
How is revenue recognized? – If only one service is included
in the agreement, the entity recognizes revenue when that
service is performed in accordance with PSAK 23 Revenue.
If more than one service is identified, the fair value is allocated
between the services, and the recognition criteria of PSAK 23
are then applied to each service individually.
How should the entity record the transfer of cash from
customers? – When an entity receives a transfer of cash from
a customer, it must first determine whether the agreement is
within the scope of PSAK 23.
Effective Date
ISAK 27 applies prospectively to transfers of assets from
customers received on or after 1 January 2014.
ISAK 28, Extinguishing Financial Liabilities with
Equity Instruments
Significant Issues
Does the issuance of equity instruments meet the
definition of ‘consideration paid’ in accordance with PSAK
55.41? – The issuance of equity instruments to extinguish all
or part of a financial liability constitutes consideration paid in
accordance with PSAK 55.41.
How is the equity Instruments issued to extinguish a
financial liability measured at initial recognition? – An
entity should measure the equity instruments issued as
extinguishment of the financial liability at their fair value on the
date of extinguishment of the liability, unless that fair value is
not reliably measurable.
If only part of a financial liability is extinguished through the
issuance of equity instruments, the entity should assess
whether some of the consideration paid represents a
modification of the portion of the liability which remains
outstanding.
How is the difference between the carrying amounts of a
financial liability and extinguished and the initial
measurement of equity instruments issued be accounted?
– Any difference between the carrying amount of the liability
(or part of the liability) extinguished and the fair value of equity
instruments issued is recognised in profit or loss, in
accordance with PSAK 55.41.
Effective Date
The Interpretation is effective for annual periods beginning on
or after 1 January 2014 and retrospectively applied from the
beginning of the earliest comparative period presented.
ISAK 29, Stripping Costs in the Production Phase of
a Surface Mine
Significant Issues
How should the production stripping costs as an asset be
recognized? – When the benefit from the stripping activity is
realised in the form of inventory produced, the entity should
account for the cost of that stripping activity in accordance with
principles of PSAK 14 Inventories.
When the benefit from the stripping activity is realized in the
form of improved access to ore deposits, the entity should
recognise these costs as a non-current asset (―stripping
activity asset‖), if certain criteria are met.
How should stripping activity asset be initially measured?
– The stripping activity asset should be initially measured at
cost being those ―cost directly incurred to perform the stripping
activity that improves access to the identified component of
ore, plus an allocation of directly attributable overhead costs‖.
How should the stripping activity asset be subsequently
measured? – The stripping activity asset should be carried at
cost or its revalued amount less depreciation or amortization
and impairment losses.

Effective Date
The Interpretation is effective for annual periods beginning on or
after 1 January 2014 and retrospectively applied from the
beginning of the earliest comparative period presented. Early
adoption is not permitted.
PPSAK 12, Withdrawal of PSAK 33 (Stripping Cost
Activity and Environmental Management in the Public
Mining)
The consideration for the withdrawal of PSAK 33 is the
convergence towards International Financial Reporting
Standards (IFRS). The effective date is beginning on or after 1
January 2014.
New accounting standards and amendments
mandatorily effective for periods beginning
on or after 1 January 2015
PSAK 1 (r2013), Presentation of Financial Statements
Significant Amendments
 Change of title –the title of Statement of Comprehensive
Income into Statement of Profit or Loss and Other
Comprehensive Income.
 Presentation of other comprehensive income (OCI) –
Requires entities to group items presented in OCI based on
whether (i) Items might be reclassified to profit or loss
(recyclable); (ii) Items that will not be reclassified to profit or
loss (non-recyclable).
Income tax on items presented in OCI will be allocated
between items that might be subsequently 'recycled' (i.e.
gain or loss from translation of financial statement and gain
or loss from remeasurement of ―held-to-maturity‖ financial
asset) and those that will not be 'recycled' (i.e. changes in
revaluation surplus and remeasurement of defined benefit
program).
Effective Date
PSAK 1 (r2013) will be effective on or after 1 January 2015.
Early adoption is not permitted.
PSAK 4 (r2013), Separate Financial Statements
The objective of PSAK 4 (r2013) – The objective includes
setting the standards to be applied in accounting for
investments in subsidiaries, joint ventures, and associates when
an entity elects, or is required by local regulations, to present
separate (non-consolidated) financial statements as a
supplementary information.
Requirement for separate financial statements – PSAK 4
(r2013) does not mandate entities to produce separate financial
statements, but the standard allows parent entity to present
separate financial statements, and such financial statements
would only be supplemental information of the consolidated
financial statements. If an entity chooses to prepare separate
financial statements, then it should comply with the guidance
set forth on this standard.
Presentation, procedures and other matters related to
consolidated financial statements – Presentation
requirements of the consolidated financial statements, the
consolidation procedures, as well as those matters such as
non-controlling interests shall no longer be part of PSAK 4
(r2013). All these information shall be included in PSAK 65,
Consolidated Financial Statements.
Choice of accounting method – When an entity prepares
separate financial statements, investments in subsidiaries,
associates, and jointly controlled entities are accounted for
either:
a. At cost; or
b. At fair value in accordance with PSAK 55.
Effective Date
PSAK 4(r2013) will be effective on or after 1 January 2015.
PSAK 15 (r2013), Investments in Associates and
Joint Ventures
The scope of PSAK 15 (r2013) – This standard will cover the
accounting for investments in associates and to set out the
requirements for the application of the equity method when
accounting for investments in joint ventures.
Exemptions from applying equity method – PSAK 15
(r2013) provides exemptions from applying the equity method
when the investment in an associate or joint venture is held by,
or is held indirectly through, venture capital organisations, or
mutual funds, unit trusts and similar entities including
investment-linked insurance funds. Those investments in
associates and joint ventures may be measured at fair value
through profit or loss in accordance with PSAK 55.
Classification as held for sale – An entity may apply PSAK
58, or apply partially to investment in associates or joint
ventures that met the criteria as ‗held for sale‘.
Discontinuing the use of equity method – An entity shall
discontinue the use of the equity method from the date when
its investment ceases to be an associate or a joint venture.
Effective Date
PSAK 15 (r2013) will be effective on or after 1 January 2015.

PSAK 24 (r2013), Employee Benefits
The amendments to PSAK 24 (r2013) have four revision
arrangements regarding:
Recognition of actuarial deficit / surplus –The entity is
required to recognise changes in defined benefit obligations and
plan assets when they occur. All actuarial gains and losses are
now immediately recognized in OCI, therefore, both corridor
approach and the immediate recognition in profit or loss were
eliminated. The standard also required immediate recognition of
changes in pension related assets and liabilities.
Interest on the net defined benefit liability / assets – PSAK
24 (r2013) introduces the concept of recognising net interest on
the net defined liability / asset in place of the interest on the
defined benefit obligation and the expected return on the plan
asset. The net interest on the net defined benefit liability / asset
is defined as the change in the net defined benefit liability /
asset during the reporting period that arises from the passage of
time; it is determined by multiplying the net defined benefit
liability / asset by the discount rate (market yield on high quality
corporate bonds). Effectively, this means that the defined
benefit obligation and the plan assets are multiplied by the
same interest rate.
Presentation of components of net defined liability / asset –
The amendments introduce a new approach for presenting
changes in defined benefit obligations and plan assets in the
statement of profit or loss and other comprehensive income.
Post-employment benefits: additional disclosure
requirements – the net defined benefit liability / asset would
reflect the amount of deficit / surplus to the long term post-
employment benefit.
Effective Date
PSAK 24(r2013) will be applied effective on or after 1 January
2015. Option for early adoption is not permitted.
PSAK 65, Consolidated Financial Statements
PSAK 65 addresses issues as follows:
The definition of control – An investor controls an investee
when it is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee.
Characteristics of joint arrangements – A joint arrangement
has the following characteristics:
a. The parties are bound by a contractual arrangement.
b. The contractual arrangement gives two or more of those
parties joint control of the arrangement.
Guidance for control determination – PSAK 65 provides
guidance to consider in determining whether the investor is able
to cast control over investee.
Principal vs agent – PSAK 65 requires the principal vs agent
connection should be considered in performing assessment.
The standard provides factors to consider in assessing whether
the decision maker acts as a principal or agent.
Effective Date
PSAK 65 will be effective on or after 1 January 2015. Option
for early adoption is not permitted.
PSAK 66, Joint Arrangements
PSAK 66 addresses issues as follows:
The definition and terminology – PSAK 66 introduced the
term ―joint arrangements‖ to cover a jointly controlled
arrangement. The standard classifies joint arrangements into
two types—joint operations and joint venture.
A joint operation is a joint arrangement whereby the parties
that have joint control of the arrangement (i.e. joint operators)
have rights to the assets, and obligations for the liabilities,
relating to the arrangement.
A joint venture is a joint arrangement whereby the parties that
have joint control of the arrangement (ie joint venturers) have
rights to the net assets of the arrangement.
Accounting treatment for joint arrangements – The
standard requires a joint operator to recognise and measure
the assets and liabilities (and recognise the related revenues
and expenses) in relation to its interest in the arrangement in
accordance with relevant IFRSs applicable to the particular
assets, liabilities, revenues and expenses.
The standard requires a joint venturer to recognise an
investment and to account for that investment using the equity
method in accordance with PSAK 15 (r2013), Investments in
Associates and Joint Ventures, unless the entity is exempted
from applying the equity method as specified in that standard.
Interest in unconsolidated structured entities – PSAK 67
defines structured entity as ―an entity that has been designed
so that voting or similar rights are not the dominant factor in
deciding who controls the entity.‖ Example: securitisation
vehicle, asset-backed financing, and certain investment funds.
The standards also require extensive disclosures to help the
users understand the nature and extent of an entity‘s interest
in unconsolidated structured entities and the risks associated
with those interests.
Effective Date
PSAK 66 will be effective on or after 1 January 2015. Option
for early adoption is not permitted.
PSAK 67, Disclosure of Interests in Other Entities
PSAK 67 addresses the following issues:
Scope of PSAK 67 – The standards covers an entity that has
an interest in any of the following:
a. Subsidiaries.
b. Joint arrangements (ie joint operations or joint ventures).
c. Associates.
d. Unconsolidated structured entities.

However, PSAK 67 scoped out the following:
a. Employee benefits;
b. Entity‘s separate financial statements.
c. An interest held by an entity that participates in, but does
not have joint control of, a joint arrangement unless that
interest results in significant influence.
d. Interest in other entity that is accounted for using PSAK 55.
Interest in subsidiaries – An entity that is a parent should
disclose information regarding:
a. The composition of the group;
b. Non-controlling interests (including summarised financial
information about each subsidiaries with material NCI);
c. The nature and extent of significant restrictions on parents
ability to access or use the assets and settle the liabilities of
its subsidiary;
d. The nature of, and changes in, the risk associated with
interests in consolidated structured entities; and
e. The effect of ownership interest that did or did not results in
a loss of control during the reporting period.
Interest in joint arrangements and associates – An entity
should disclose the information about the nature, extent, and
financial effects of its interest in joint arrangements and
associates, including information about contractual relationship
with other parties to the joint arrangements or other investors
that have interest in associates.
Effective Date
PSAK 67 will be effective on or after 1 January 2015. Option for
early adoption is not permitted.
PSAK 68, Fair Value Measurement
PSAK 68, Fair Value Measurement has fully adopted IFRS 13,
Fair Value Measurement.
Some Standards require or permit entities to measure or
disclose the fair value of assets, liabilities or their own equity
instruments. Because those Standards were developed over
many years, the requirements for measuring fair value and for
disclosing information about fair value measurements were
dispersed and in many cases did not articulate a clear
measurement or disclosure objective. As a result, some of those
Standards contained limited guidance about how to measure
fair value, whereas others contained extensive guidance and
that guidance was not always consistent across those
Standards that refer to fair value.
PSAK 68 established a single framework to measure fair value
where that is required by other standards. The Standards apply
to both financial and non-financial items measured at fair value.
PSAK 68 addresses the following issues:
Definition of fair value – The standard defines fair value as
―the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market
participants at the measurement date.‖ In simple term, this
would refer as the ―exit price‖.
Determination of fair value – PSAK 68 indicates that an
entity must determine the following to arrive at an appropriate
measure of fair value:
a. The asset or liability being measured (consistent with its
unit of account).
b. The principal or most advantageous market in which
orderly transaction would take place for the asset or
liability.
c. For a non-financial asset, the highest and best use of the
asset.
d. Those assumptions which the market participant would
use when pricing the asset or liability.
Valuation techniques – When transaction is directly
observable in the market, the determination of fair value is
straight forward, but when they are not, a valuation technique
is used.
Fair value hierarchy – PSAK 68 seeks to increase
consistency and comparability in fair value measurements and
related disclosures through a 'fair value hierarchy'. The
hierarchy categorises the inputs used in valuation techniques
into three levels. The hierarchy gives the highest priority to
(unadjusted) quoted prices in active markets for identical
assets or liabilities and the lowest priority to unobservable
inputs.
a. Level 1 inputs
Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date. A quoted market price
in an active market provides the most reliable evidence of
fair value and is used without adjustment to measure fair
value whenever available, with limited exceptions.
b. Level 2 inputs
Level 2 inputs are inputs other than quoted market prices
included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
c. Level 3 inputs
Level 3 inputs are unobservable inputs for the asset or
liability. Unobservable inputs are used to measure fair
value to the extent that relevant observable inputs are not
available, thereby allowing for situations in which there is
little, if any, market activity for the asset or liability at the
measurement date.
An entity develops unobservable inputs using the best
information available in the circumstances, which might
include the entity's own data, taking into account all
information about market participant assumptions that is
reasonably available.
Disclosure – Entity is required to disclose quantitative and
qualitative information about fair value measurement. It would
help users of financial statements to assess both of the
following:
a. For assets and liabilities that are measured at fair value
on a recurring or non-recurring basis in the statement of
financial position after initial recognition, the valuation
techniques and inputs used to develop those
measurements.

b. For fair value measurements using significant unobservable
inputs (Level 3), the effect of the measurements on profit or
loss or other comprehensive income for the period.
Effective Date
PSAK 68 will be effective on or after 1 January 2015. Option for
early adoption is not permitted.
Exposure Drafts (EDs) relating to standards
and interpretation proposed to be applicable
starting 1 January 2015
ED PSAK 46 (r2013), Income Taxes
ED PSAK 46 (r2013), Income Taxes has been adopted from
IAS 12, Income Taxes.
The Proposal
The proposal addresses issues as follows:
Deferred tax liability or deferred tax asset arises from a
non-depreciable asset – Arrange the deferred tax liabilities or
deferred tax assets arise from a non-depreciable asset as
measured using the revaluation model.
Deferred tax liability or asset arises from investment
property – Arrange the deferred tax liability or asset arises from
investment property that is measured using the fair value model.
Final tax and special arrangements – In ED PSAK 46 (r2013),
arrangements of the final tax and other special arrangements
have been removed.
Effective Date
ED PSAK 46 will be effective for annual periods beginning on or
after 1 January 2015. Option for early adoption is not permitted.
ED PSAK 48 (r2013), Impairment of Assets
ED PSAK 48 (r2013), Impairment of Assets has been adopted
from IAS 36, Impairment of Assets.
The Proposal
The definition and terminology – Provide definitions fair value
in accordance with PSAK 68 and there are two changes in the
terminology of the previous "fair value less costs to sell" to "fair
value less costs of disposal" and "determination of fair value" to
"fair value measurement".
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Fair value less costs of disposal – Fair value less costs of
disposal refers to the fair value hierarchy under PSAK 68.
Composition of estimates of future cash flows – Provide an
additional explanation of the difference in fair value and value in
use.
Allocating goodwill to cash-generating units – Each unit or
group of units to which the goodwill is so allocated shall:
 represent the lowest level within the entity at which the
goodwill is monitored for internal management purposes;
and
 not be larger than an operating segment determined in
accordance with PSAK 5 Operating Segments.
Disclosure – Provide additional disclosure requirements each
material impairment loss recognised or reversed during the
period for an individual asset, including goodwill, or a cash-
generating:
 the recoverable amount of the asset (cash-generating
unit) is its fair value less costs of disposal or its value in
use
 if the recoverable amount is fair value less costs of
disposal, an entity shall disclose:
 the level of the fair value hierarchy in accordance with
PSAK 68
 assessment techniques (level 2 and 3)
 every principal assumptions underlying management
to determine fair value less costs of disposal (level 2
and 3)
Effective Date
ED PSAK 48 (r2013) will be effective on or after 1 January
2015. It should be applied prospectively with reference to
PSAK 68, Fair Value Measurement, early adoption is not
permitted.
ED PSAK 50 (r2013), Financial Instrument:
Presentation
ED PSAK 50 (r2013), Financial Instrument: Presentation has
been adopted from IAS 32, Financial Instrument: Presentation.
The Proposal
Definition – Following the definition of fair value in PSAK 68:
Fair Value Measurement.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Recognition of fair value at the completion of the equity
instruments issued by the entity – Financial liabilities at
initial recognition are recognized at the present value of the
redemption amount and reclassified from equity.
Income tax relating to distributions to holders of an equity
instrument – Income tax relating to distributions to holders of
an equity instrument and to transaction costs of an equity
transaction shall be accounted for in accordance with PSAK
46: Income Taxes.
Disclosure of offsetting a financial asset and a financial
liability – There are additional disclosures in accordance with
ED PSAK 60 (r2013): Financial Instruments: Disclosures
paragraphs 13B-13E for financial instruments that meet the
criteria of paragraph 13A.

Criterion that an entity 'currently has a legally enforceable
right to set off the recognised amounts' – To meet the
criterion, an entity must currently have a legally enforceable
right of set-off. This means that the right of set-off:
 must not be contingent on a future event
 must be legally enforceable in all of the following
circumstances:
 the normal course of business
 the event of default
 the event of insolvency or bankruptcy of the entity and
all of the counterparties
Net settlement criterion – There is arrangements criterion that
an entity 'intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously'.
Effective Date
2015. Option for early adoption is permitted, except paragraph
07, 26 and PA41.
Recognition and Measurement
ED PSAK 55 (r2013), Financial Instrument: Recognition and
Measurement has been adopted from IAS 39, Financial
Instrument: Recognition and Measurement.
The Proposal
Fair value – Definition of fair value, disclosure of the fair value
measurement of financial assets or financial liabilities,
consideration of fair value, valuation techniques of financial
instruments in inactive markets and input in valuation
techniques fair value of financial instruments according to PSAK
68: Fair Value Measurement.
Measurement of embedded derivatives reclassification – If
an entity is unable to measure separately the embedded
derivative that would have to be separated on reclassification of
a hybrid (combined) contract out of the fair value through profit
or loss category, that reclassification is prohibited. In such
circumstances the hybrid (combined) contract remains classified
as at fair value through profit or loss in its entirety.
Qualifying items – Hedge accounting can be applied to
transactions between entities in the same group.
Designation of hedging instrument – Hedging instrument is
deemed to have expired or sold, terminated or exercised if:
 as a consequence of the law or regulation or the
introduction of a law or regulation
 other changes, if any, for the limited hedging instruments to
other changes necessary to effect the above replacement
counterparty
Cash flow hedge period – Hedging period is recognised in the
same period or during hedging periods of the cash flow
forecast.
Separation of embedded derivatives – There is additional
arrangement related to purchase options, put option, or an early
repayment option attached to the host debt contract or host
insurance contract is not closely related to the host contract, ie:
if the option exercise price paid for the lender up to the amount
of the present value forecasts for the loss of desire for the
remaining term of main contract.
Recording the date when the fair value of financial
instruments at the time of recognition differs from the
transaction price – The entity recorded financial instruments
on the following dates:
 on the measurement date if fair value can be evidenced
by the quoted prices in active markets for similar assets or
liabilities
 on the date after the initial recognition
Assessing hedge effectiveness – For the avoidance of
doubt, an entity must disclose the effects of substituting the
original counterparty with clearing counterparties and make
changes that are reflected in the measurement of hedging
instruments and are also reflected in the assessment and
measurement of hedge effectiveness.
Effective Date
2(f), 09, 13, 28, 43A, 47, 88, 106, 109, PA43(g), PA61, PA67,
PA79, PA91, PA92, PA96, PA97 and PA112.
Disclosure
ED PSAK 60 (r2013), Financial Instrument: Disclosure has
been adopted from IFRS 7, Financial Instrument: Disclosure.
The Proposal
Fair value – Arrangement of disclosure and the fair value
hierarchy referred to in PSAK 68: Fair Value Measurement.
An entity does not recognise a gain or loss on initial
recognition of a financial asset or financial liability because the
fair value is neither evidenced by a quoted price in an active
market for an identical asset or liability. The entity shall
disclose by class of financial asset or financial liability:
 its accounting policy for recognising in profit or loss the
difference between the fair value at initial recognition and
the transaction price
 the aggregate difference yet to be recognised in profit or
loss
 why the entity concluded that the transaction price was
not the best evidence of fair value
Offsetting financial assets and financial liabilities – Entities
that meet the requirements of the presentation of offsetting in
PSAK 50 or entity that is subject to an enforceable master
netting arrangement or similar agreement.
Transfers of financial assets – Provide different disclosure
requirements for entities that transferred financial assets that
are not derecognised in their entirety and disclosure of
financial assets that are derecognised in their entirety.
Effective Date
03, 28-30, 31, 32 and appendix A.

ED ISAK 26 (r2013), Reassessment of Embedded
Derivatives
ED ISAK 26 (r2013), Reassessment of Embedded Derivatives
has been adopted from IFRIC 9, Reassessment of Embedded
Derivatives.
The Proposal
Requirements over the subsequent reassessment of
embedded derivatives – Consider whether there is:
 changes in the terms of the contract that significantly
modifies the cash flows required under the contract; or
 the reclassification of financial assets out of categories
measured at fair value through profit or loss (FVTPL).
ED ISAK 26 (r2013) is also providing guidance of the
assessment whether an embedded derivative is required to be
separated from the main contract and accounted for as a
derivative, in the reclassification of a financial asset out of
categories measured at FVTPL on the basis of the
circumstances that existed at the later date of:
 when the entity first becomes a party to the contract; and
 changes in the terms of the contract that significantly
modifies the cash flows that have been required under the
contract.
Effective Date
ED ISAK 26 (r2013) will be effective on or after 1 January 2015.
Option for early adoption is not permitted with consideration of
the application alignment of other standards.

Key contacts
Rosita Uli Sinaga
Audit Advisory Leader
rsinaga@deloitte.com
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implementation of the new PSAKs and IFRS, and any other inquiries on our advisory services, kindly send us an email at
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About Deloitte Indonesia
In Indonesia, services are provided by Osman Bing Satrio & Eny, Deloitte Tax Solutions and PT Deloitte Konsultan Indonesia.
This publicat ion cont ains general inf orm at ion only and is not int ended t o be com prehensive nor t o provide specif ic account ing ,
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For more information about these EDs, please visit the Indonesian Institute of Accountants (IAI) website at www.iaiglobal.or.id.
© 2014 Osman Bing Satrio & Eny

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