Hadori Sugiarto Adi & Rekan Vol. 11 A member of HLB International June 2016

Indonesia IFRS Convergence Update

PSAK 69: Agriculture

Together we grow

inspired

Table of contents

1 Foreword

2 Indonesia IFRS Convergence Update

3 PSAK 69: Agriculture

4 Key Contacts

Foreword

Welcome to the eleventh issue of Inspired! For the month of June 2016, we would like to share the current status of the International Financial Reporting Standards (“IFRS”) Convergence in Indonesia. The improvements, revisions and additions in IFRS have been rampant each year. As we are aware, the Indonesian Financial Reporting Standards (“Pernyataan Standar Akuntansi Keuangan” or “PSAK”) has been converged to IFRS since January 1, 2012. However, there is still a gap between these two standards brought about the changes in IFRS. To acknowledge such changes,the representatives from Dewan Standar Akuntansi Keuangan – Ikatan Akuntan Indonesia (DSAK-IAI), Otoritas Jasa Keuangan (or Financial Services Authority) and IAI National Council had signed a joined statement last May 25, 2016 during the IAI IFRS International Conference held at the Ritz Carlton Hotel, Mega Kuningan, South Jakarta. The joined statement signifies the respective regulatory bodies’ commitment and full support on the IFRS Convergence which implementation is expected to cease on January 1, 2019. We have received various inputs/comments from our readers on the prior issues. This creates a room for discussion on practical and relevant issues to our clients. Since we want the journal to be as relevant as possible to your business’ needs, we look forward to hearing your inputs on each issue. If you wish us to write an article on topics relevant to your business needs, please e-mail us. Contact details are furnished at the last part of this journal.

Adi Wirawan

Senior Partner

June 2016

“Hadori Sugiarto Adi & Rekan (Hadori) is a registered public accounting and business advisers firm, established in 1973,

with offices located in Jakarta, Surabaya, Yogyakarta and Semarang, and comprises of 13 partners and more than 225

professionals. Hadori is a member of HLB International.”

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INDONESIA IFRS CONVERGENCE UPDATE

STATUS KONVERGENSI IFRS PER 1 JANUARI 2015 Pada tanggal 1 Januari 2012, Indonesia sudah mulai melakukan konvergensi (Pernyataan Standar Akuntansi Keuangan atau "PSAK") dengan International Financial Reporting Standards ("IFRS"). Disajikan dalam diagram berikut:

CONVERGENCE IFRS STATUS AS OF JANUARY 1, 2015 On January 1, 2012, Indonesia had started to convergence the Indonesian Financial Accounting Standards (Pernyataan Standar Akuntansi Keuangan or “PSAK”) with International Financial Reporting Standards (“IFRS”). Presented below is the diagram:

Hal ini tercatat terdapat 3 (tiga) tahun kesenjangan antara IFRS dan PSAK per 1 Januari 2012. Namun, dapat disimpulkan bahwa PSAK secara substansial sejalan dengan jumlah pengecualian. Pengecualian utama meliputi:

IFRS 1: Adopsi Pertama dari International Financial Reporting Standards

IAS 41: Agrikultur; dan

IFRIC 15: Perjanjian Konstruksi Real Estate. Pelaksanaan konvergensi IFRS menghasilkan kelancaran transisi sebagai hasil dari berbagai seminar, lokakarya dan konsultasi yang diberikan oleh Dewan Standar Akuntansi Keuangan - Ikatan Akuntansi Indonesia (DSAK-IAI) dan berbagai kantor akuntan publik. Selama kurun waktu 2013 - 2014, DSAK-IAI telah menerbitkan (termasuk PSAK baru dan revisi): 13 PSAK dan 4 Interpretasi Standar Akuntansi Keuangan ("ISAK") bersama dengan perbaikan tahunan SAK. Selama tahun 2015, DSAK-IAI telah menerbitkan (termasuk PSAK baru dan revisi): 11 PSAK dan 2 ISAK bersama dengan perbaikan tahunan SAK. PSAK 69 Agrikultur adalah standar baru yang dirilis pada 16 Desember 2015 yang berlaku efektif pada 1 Januari 2018. PSAK 69 diadopsi dari IAS 41 Agrikultur yang efektif pada 1 Januari 2016. Diskusi mengenai standar baru ini disajikan sebagai bagian dari HLB Inspired edisi Juni 2016.

It can be noted there was a 3 (three) years gap between IFRS and PSAK as of January 1, 2012. However, it can be inferred that the PSAKs are substantially in line with number of exceptions. Main exceptions include:

IFRS 1: First-time Adoption of International Financial Reporting Standards

IAS 41: Agriculture; and

IFRIC 15: Agreements for the Construction of Real Estate.

The implementation of the IFRS convergence resulted to a smooth transition as a result of the various seminars, workshops and consultations provided by Dewan Standar Akuntansi Keuangan – Ikatan Akuntansi Indonesia (DSAK-IAI) and various public accounting firms. During 2013 – 2014, DSAK-IAI had issued (including new and revision): 13 PSAK and 4 Interpretasi Standar Akuntansi Keuangan (“ISAK”) along with annual improvements of SAK. During 2015, DSAK-IAI had issued (including new and revision): 11 PSAK and 2 ISAK along with annual improvements of SAK. PSAK 69 Agriculture was the new standard released on December 16, 2015 which is effective on January 1, 2018. PSAK 69 was adopted from IAS 41 Agriculture which was effective on January 1, 2016. A separate discussion on this new standard is part of this June 2016 edition of Inspired.

IFRS per 1 Januari 2009/

IFRS as of January 1, 2009

SAK per 1 Januari 2012/

SAK as of January 1, 2012

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SAK efektif per 1 Januari, 2015 setara dengan IFRS efektif pada tanggal 1 Januari 2014. Hal ini mengakibatkan kesenjangan 1 (satu) tahun. Perbaikan, revisi dan penambahan dalam IFRS telah konstan sejak saat itu. Perwakilan dari DSAK-IAI, Otoritas Jasa Keuangan dan Dewan Nasional IAI telah menandatangani joined statement terakhir pada 25 Mei 2016 selama Konferensi International IFRS IAI yang digelar di Ritz Carlton Hotel, Mega Kuningan, Jakarta Selatan. Joined statement tersebut menandakan komitmen masing-masing badan pengawas dan dukungan penuh pada Konvergensi IFRS yang pelaksanaannya diharapkan berakhir pada tanggal 1 Januari 2019. PROYEK KONVERGENSI SAAT INI Standar saat ini yang berada dalam lingkup proyek konvergensi pada 2016-2017 mencakup:

SAK effective as of January 1, 2015 is at par with IFRS effective as of January 1, 2014. This resulted to a 1 (one) year gap. Improvements, revisions and additions in IFRS have been constant since then. Representatives from DSAK-IAI, Otoritas Jasa Keuangan (or Financial Services Authority) and IAI National Council had signed a joined statement last May 25, 2016 during the IAI IFRS International Conference held at the Ritz Carlton Hotel, Mega Kuningan, South Jakarta. The joined statement signifies the respective regulatory bodies’ commitment and full support on the IFRS Convergence which implementation is expected to cease on January 1, 2019. CURRENT CONVERGENCE PROJECTS The current standards under convergence

projects in 2016-2017 include:

No. IFRS Tanggal efektif

IFRS/ IFRS

Effective Date

Target Tanggal Efektif pada

SAK Indonesia/ Target

Effective Date in Indonesia’s

SAK

1 IFRS 15: Pendapatan Kontrak

dengan Pelanggan/ IFRS 15:

Revenue from Contracts with

Customers

1 Januari 2018/

January 1, 2018

1 Januari 2019/ January 1, 2019

2 IFRS 9: Instrumen Keuangan/ IFRS 9:

Financial Instruments

1 Januari 2018/

January 1, 2018

1 Januari 2019/ January 1, 2019

3 IFRS 16: Sewa/ IFRS 16: Leases 1 Januari 2019/

January 1, 2019

1 Januari 2020/ January 1, 2020

Beberapa pengecualian dari konvergensi IFRS antara lain: 1. IFRS 1: Adopsi Pertama dari International

Financial Reporting Standards 2. IFRS 14: Regulasi Akun Tangguhan 3. IFRIC 12: Saham Anggota pada Entitas

Koperasi dan Instrumen Sejenis 4. IFRIC 5: Hak untuk Kepentingan Transaksi

Purna Operasi, Restorasi dan Dana Rehabilitasi Lingkungan

5. IFRIC 6: Kewajiban Transaksi Berpartisipasi dalam Pasar Khusus-Limbah Listrik dan Peralatan Elektronik

6. SIC 7: Pengenalan Euro

7. SIC 31: Pendapatan – Transaksi Barter Melibatkan Jasa Periklanan

Some exceptions from IFRS convergence, amongst others, are as follows: 1. IFRS 1: First-time Adoption of International

Financial Reporting Standards 2. IFRS 14: Regulatory Deferral Accounts 3. IFRIC 12: Members’ Shares in Cooperative

Entities and Similar Instruments 4. IFRIC 5: Rights to Interests Arising from

Decommissioning, Restoration and Environmental Rehabilitation Funds

5. IFRIC 6: Liabilities Arising from Participating in a Specific Market-Waste Electrical and Electronic Equipment

6. SIC 7: Introduction of the Euro

7. SIC 31: Revenue – Barter Transactions Involving Advertising Services

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TANTANGAN PADA KONVERGENSI IFRS Entitas di Indonesia dihadapkan pada beberapa tantangan untuk adopsi penuh IFRS. Hal tersebut mencakup:

Struktur legal

Konsistensi interpretasi/ isu implementasi

Transaksi berbasis syariah

Keterlibatan pemangku kepentingan

Profesi penunjang

Edukasi publik

Translasi IFRS ke bahasa lokal Entitas memiliki waktu yang cukup untuk mempersiapkan adopsi dari standar yang akan datang dengan menentukan dampak pada laporan keuangan mereka. Mulai membuat daftar keuntungan dan kerugian dari adopsi tersebut. Jika Anda merasa ragu pada proses implementasi yang tepat, tim kami dapat memberikan pendampingan khusus untuk tim Anda.

CHALLENGES ON IFRS CONVERGENCE The entities in Indonesia are exposed to several challenges to fully adopt IFRS. These include:

Legal structure

Consistency of interpretation/ implementation issues

Sharia-based transactions

Stakeholder engagement

Supporting professions

Public Education

Translation of IFRS into local language The entities have ample time to prepare on the adoption of the forthcoming standards by determining the impact on their financial statements. Start to list down the benefits and disadvantages of such adoption. If you are in doubt on the proper implementation process, our team can be of special assistance to your team.

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PSAK 69: AGRICULTURE

ADOPSI IAS 41 (REVISI 2014): AGRIKULTUR PSAK 69 – Agrikultur diadopsi secara signifikan dari ketentuan yang diatur dalam IAS 41 Agrikultur (Revisi 2014) yang berlaku efektif pada tanggal 1 Januari 2016. PSAK 69 akan berlaku efektif pada tanggal 1 Januari 2018. Berdasarkan PSAK 69, persyaratan akuntansi untuk aset biologis yaitu memenuhi definisi dari tanaman produktif (misalnya pohon berbuah). Tanaman produktif saat ini berada pada ruang lingkup PSAK 16 Aset tetap, dan akan dikenakan semua persyaratan di dalamnya. Hal ini termasuk kemampuan untuk memilih antara model biaya dan model revaluasi untuk pengukuran berikutnya. Produk agrikultur tumbuh pada tanaman produktif (misalnya buah yang tumbuh di pohon) akan tetap berada pada ruang lingkup PSAK 69 Agrikultur. Hibah Pemerintah yang terkait dengan tanaman produktif akan dicatat sesuai dengan PSAK 61 Akuntansi Hibah Pemerintah dan Pengungkapan Bantuan Pemerintah, bukan sesuai dengan PSAK 69. DEFINISI TANAMAN PRODUKTIF Tanaman produktif didefinisikan sebagai tanaman hidup yang:

Digunakan dalam produksi atau penyediaan produk agrikultur;

Diharapkan untuk menghasilkan produk untuk jangka waktu lebih dari satu periode; dan

Memiliki kemungkinan yang sangat jarang untuk dijual sebagai produk agrikultur, kecuali untuk penjualan sisa yang insidental.

Semua kriteria di atas harus terpenuhi untuk aset biologis agar dapat dianggap sebagai tanaman produktif. Definisi tersebut menggambarkan tanaman yang akan secara intuitif dianggap sebagai tanaman produktif, misalnya, anggur. Selain itu, beberapa tanaman yang tampak consumable, seperti sistem akar tanaman tahunan (misalnya, tebu atau bambu) diharapkan dapat memenuhi definisi tanaman produktif.

ADOPTION OF IAS 41 (REVISED 2014): AGRICULTURE PSAK 69 – Agriculture adopted significantly the provisions set forth in IAS 41 Agriculture (Revision 2014) which was effective on January 1, 2016. PSAK 69 will be effective on January 1, 2018. Based on PSAK 69, the accounting requirements for biological assets that meet the definition of bearer plants (e.g., fruit trees). Bearer plants will now be within the scope of PSAK 16 Property, Plant and Equipment and will be subject to all of the requirements therein. This includes the ability to choose between the cost model and revaluation model for subsequent measurement. Agricultural produce growing on bearer plants (e.g., fruit growing on a tree) will remain within the scope of PSAK 69 Agriculture. Government grants relating to bearer plants will now be accounted for in accordance with PSAK 61 Accounting for Government Grants and Disclosure of Government Assistance, instead of in accordance with PSAK 69. DEFINITION OF BEARER PLANT A bearer plant is defined as “a living plant that:

is used in the production or supply of agricultural produce;

is expected to bear produce for more than one period; and

has a remote likelihood of being sold as agricultural produce, except for incidental scrap sales.

All of the above criteria need to be met for a biological asset to be considered a bearer plant. The definition captures plants that would intuitively be considered to be bearers, for instance, grape vines. In addition, some plants that may appear to be consumable, such as the root systems of perennial plants (e.g., sugar cane or bamboo) are expected to meet the definition of a bearer plant.

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Tanaman semusim dan tanaman lainnya yang ditanam hanya untuk dipanen sebagai produk agrikultur (misalnya, beberapa tanaman pertanian tradisional seperti jagung, gandum dan kedelai, serta pohon-pohon yang ditanam untuk diambil kayunya), tidak diharapkan untuk memenuhi definisi tanaman produktif. Selain itu, tanaman yang memiliki penggunaan ganda, yaitu, baik produk yang dihasilkan dan tanaman itu sendiri yang dijual baik sebagai tanaman hidup atau produk agrikultur (di luar penjualan sisa yang insidental), tidak akan memenuhi definisi tersebut. Hal ini mungkin terjadi ketika, misalnya, suatu entitas memiliki pohon karet untuk dijual getah karetnya sebagai hasil pertanian dan pohon-pohonnya sebagai kayu potong. Tabel di bawah ini menyediakan beberapa contoh aset biologis, produk agrikultur dan produk yang merupakan hasil pemrosesan setelah panen:

Annual crops and other plants that are held solely to be harvested as agricultural produce (e.g., many traditional arable crops such as maize, wheat and soya, as well as trees grown for lumber), are not expected to meet the definition of a bearer plant. In addition, plants that have a dual use, that is, both bearing produce and the plant itself being sold as either a living plant or agricultural produce (beyond incidental scrap sales), will not meet the definition. This may be the case when, for example, an entity holds rubber trees to sell both the rubber milk as agricultural produce and the trees as lumber. The table below provides examples of biological assets, agricultural produce and products that are the result of processing after harvest:

Aset Biologis/Biological

Assets

Produk Agrikultur/Agricultural

Produce

Produk yang merupakan

hasil pemrosesan setelah

panen/Products that are

the result of processing

after harvest

Domba/Sheep Wol/Wool Benang, karpet/Yarn,

carpet

Pohon dalam hutan

kayu/Trees in a timber

plantation

Pohon tebangan/Felled trees Kayu gelondongan,

potongan kayu/Logs,

lumber

Sapi perah/Dairy cattle Susu/Milk Keju/Cheese

Babi/Pigs Daging potongan/Carcass Sosis, ham (daging

asap)/Sausages, cured

hams

Tanaman kapas/Cotton

plants

Kapas panen/Harvested cotton Benang, pakaian/Thread,

clothing

Tebu/Sugarcane Tebu panen/Harvested cane Gula/Sugar

Tanaman tembakau/Tobacco

plants

Daun tembakau/Picked leaves Tembakau/Cured tobacco

Tanaman teh/Tea bushes Daun the/Picked leaves Teh/Tea

Tanaman anggur/Grape

vines

Buah anggur/Picked grapes Minuman anggur/Wine

Tanaman buah-buahan/Fruit

trees

Buah petikan/Picked fruit Buah olahan/Processed

fruit

Pohon kelapa sawit/Oil

palms

Buah kelapa sawit/Picked fruit Minyak kelapa sawit/Palm

oil

Pohon karet/Rubber trees Getah karet/Harvested latex Produk olahan

karet/Rubber products

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Beberapa tanaman, sebagai contoh, tanaman teh, tanaman anggur, pohon kelapa sawit, dan pohon karet, biasanya memenuhi definisi tanaman produktif dan termasuk dalam ruang lingkup PSAK 16. Namun, produk yang tumbuh pada tanaman produktif, sebagai contoh, daun teh, buah anggur, buah kelapa sawit, dan getah karet, termasuk dalam ruang lingkup PSAK 69. Some plants, for example, tea bushes, grape vines, oil palms and rubber trees, usually meet the definition of a bearer plant and are within the scope of PSAK 16. However, the produce growing on bearer plants, for example, tea leaves, grapes, oil palm fruit and latex is within the scope of PSAK 69.

Hewan produktif, sama seperti tanaman produktif, dapat diadakan semata-mata untuk menghasilkan produk yang mereka hasilkan. Namun, hewan produktif yang dicatat atas dasar PSAK 69 model pengukurannya akan menjadi lebih kompleks jika diterapkan pada aset tersebut. PSAK 69 mengharuskan untuk membagi tanaman dan produknya menjadi dua aset (yaitu dua unit akun), dengan model pengukuran yang berbeda. Tanaman produktif akan disajikan sebagai aset tidak lancar. Produk agrikultur biasanya akan disajikan menjadi aset lancar, kecuali dibutuhkan lebih dari satu tahun untuk menghasilkan. PENGUKURAN TANAMAN PRODUKTIF Tanaman produktif merupakan subyek untuk semua persyaratan pengakuan dan pengukuran pada PSAK 16 termasuk antara lain:

Sebelum menghasilkan, tanaman produktif akan diukur pada akumulasi biayanya, sama seperti perlakuan untuk aset tetap yang dikonstruksi sendiri dan sebelum dapat digunakan.

Setelah tanaman produktif menghasilkan, entitas akan memiliki pilihan kebijakan untuk mengukur tanaman produktif mengunakan model biaya atau model revaluasi.

Bearer animals, like bearer plants, may be held solely for the produce that they bear. However, bearer animals are to be accounted for under PSAK 69 on the basis that the measurement model would become more complex if applied to such assets. PSAK 69 requires to split the plant and the produce into two assets (i.e. two units of account), with different measurement models. Bearer plants will be presented as non-current assets. Agricultural produce will usually be a current asset, unless it takes more than a year to mature. MEASUREMENT OF A BEARER PLANTS Bearer plants is subject to all the recognition and measurement requirements of PSAK 16, including the following:

Before maturity, bearer plants will be measured at their accumulated cost, similar to the accompanying treatment for a self-constructed item of plant and equipment before it is available for use.

After the bearer plants mature, entities will have a policy choice to measure the bearer plants using either the cost model or the revaluation model.

Persyaratan Pengukuran untuk Tanaman Produktif/Measurement Requirements for

Bearer Plants

Persyaratan/Requirements

Pada saat pengakuan awal/

At initial recognition

Diukur secara terpisah dari beberapa produk agrikultur yang melekat (yaitu dua unit akun)/ Measured separately from any agricultural produced attached (i.e., two units of account)

Diukur pada biaya, terakumulasi sampai menghasilkan/ Measured at cost, accumulated until maturity

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Persyaratan pengukuran

setelahnya/Subsequent

measurement requirements

Diukur pada/Measured at: Biaya, dikurangi akumulasi penyusutan dan penurunan

nilai, dengan perubahannya diakui pada laporan laba rugi/ Cost, less any subsequent accumulated depreciation and impairment, with changes recognized in profit or loss

ATAU/OR

Nilai wajar pada setiap tanggal revaluasi, dikurangi akumulasi penyusutan dan penurunan nilai. Penyesuaian revaluasi (dan penurunan nilai, sejauh itu membalikkan kenaikan revaluasi sebelumnya) diakui sebagai pendapatan komprehensif lain; semua perubahan lainnya diakui pada laporan laba rugi./ Fair value at each revaluation date, less any subsequent accumulated depreciation and impairment. Revaluation adjustments (and impairment, to the extent it reverses previous revaluation increases) recognized in other comprehensive income; all other changes recognized in profit or loss.

Persyaratan Pengukuran Produk Agrikultur/Measurement Requirements of Agricultural

Produce

Persyaratan/Requirements

Pada akhir setiap periode pelaporan

sebelum panen/At the end of each

reporting period prior to harvest

Diukur secara terpisah dari tanaman produktif pada

nilai wajar dikurangi biaya untuk menjual/Measured

separately from the bearer plant at fair value less

costs to sell

Pada saat panen/At the point of

harvest

Diukur secara terpisah dar tanaman produktif pada

nilai wajar dikurangi biaya untuk menjual/Measured

separately from the bearer plant at fair value less

costs to sell

Tantangan dalam Praktik

Identiikasi biaya yang dapat dikapitalisasi menurut PSAK 16 dan PSAK 69

Menelusur tanaman produktif dan produk yang tidak dipanen secara terpisah

Jika model revaluasi diterapkan, entitas harus menentukan metodologi pengukuran nilai wajar yang sesuai (misalnya teknik discounted cash flow) untuk mengukur nilai wajar aset tersebut secara terpisah dari tanaman produktif dimana mereka tumbuh, yang dapat meningkatkan kompleksitas dan subyektivitas pengukuran.

Pelaksanaan awal PSAK 69 memerlukan pertimbangan cermat atas tantangan-tantangan di atas. Untuk memastikan penerapan PSAK 69 yang sesuai, tim kami dapat membantu Anda untuk mengatasi permasalahan Anda.

Challenges in Practice

Identifying costs that can be capitalized under PSAK 16 and PSAK 69

Tracking bearer plants and unharvested produce separately

If revaluation model is to be applied, entities need to determine the appropriate fair value measurement methodologies (e.g. discounted cash flow techniques) to measure the fair value of these assets separately from the bearer plants on which they are growing, which may increase the complexity and subjectivity of the measurement.

Initial implementation of PSAK 69 entails careful consideration of the above challenges. To ensure proper application of PSAK 69, our team can assist you to address your concerns.

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Key Contacts Should you need further clarification on the information included in this issue, or

would require any assistance in the implementation of the new accounting

standards, taxation, regulation, and any other inquiries on our advisory services,

kindly send us an email at info@hlbjakarta.com or call us at +62-21-5761667.

Adi Wirawan

Senior Partner

adiwirawan@hlbjakarta.com

Yulianti Sugiarta

Partner

yuli@hlbsurabaya.com

Riza Manalo Paguio

Senior Technical Advisor

riza@hlbjakarta.com

Wahyu Wibowo

Partner

wahyu.wibowo@hlbjakarta.com

Wijanarko

Partner

wijanarko@hlbjakarta.com

Velix Sogen

Partner

velix_sogen@hlbjakarta.com

Contributors:

Riza Manalo Paguio riza@hlbjakarta.com

Sri Agustina sri.agustina@hlbjakarta.com

Cover Photo:

Riza Manalo Paguio

Cover Photo Location:

Istana in Botanical Garden, Bogor

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About Hadori Sugiarto Adi & Rekan

Hadori & Rekan is a registered public accounting and business advisers firm. We have been established since 1973, with offices located in Jakarta, Surabaya, Yogyakarta and Semarang. The firm represents a group of specialist providing business advices and services to a wide range of business organizations, including private, public, state-owned enterprises and not-for-profit organizations.

Since 1988, Hadori & Rekan joined HLB International, a worldwide accounting firms and business advisers. Having this membership each member firm has the right to use HLB in their name to present a blend of international and local name. It emphasizes the strength of both the international organization and the local firm whilst, at the same time, demonstrating the close bond between the two. Accordingly, the brand name Hadori & Rekan change to Hadori & Rekan (currently Hadori Sugiarto Adi & Rekan). Such change has been approved by the Ministry of Finance.

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accounting and business advisory firms in 130 countries, with 1,900 partners and 17,000 staffs in 600 offices

worldwide.

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