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View all search resultsAll listed companies must adopt IFRS in 2012: Bapepam
The Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) has warned publicly listed companies to be prepared to adopt the International Financial Reporting Standards (IFRS), which will be fully implemented in the country in 2012
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T
he Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) has warned publicly listed companies to be prepared to adopt the International Financial Reporting Standards (IFRS), which will be fully implemented in the country in 2012.
“Starting in January next year, both listed and unlisted companies will be required to fully implement the international standards in their financial reports,” Bapepam-LK director for transparency and accounting standards Etty Retno Wulandari said at an accounting seminar in Jakarta on Tuesday.
Etty warned that publicly listed companies that failed to comply with the new standards by the deadline would be either fined or would face administrative sanctions.
A number of preparations have been made since early 2008 as part of the government’s commitment to adopt the IFRS, including gradually adjusting the new financial reporting standards into the Indonesian Generally Accepted Accounting Principles (GAAP).
Etty said the Indonesian GAAP was 60 percent compliant with the IFRS principles.
“We hope the national accounting standards will be 90 percent compliant with the IFRS in 2012 as targeted by the government,” she said at the seminar, which discussed the Implementation of the IFRS in Indonesia.
Patrick Finnegan from the 15-member International Accounting Standards Board (IASB) also addressed the seminar.
The IASB is the standard-setting body of the International Accounting Standard Committee (IASC) Foundation. It has the responsibility for setting the IFRS.
Finnegan said 100 countries had committed to adopting the IFRS in their respective accounting standards between 2011 and 2015. “Some countries, including Australia, Hong Kong and Singapore, have implemented the IFRS,” he told The Jakarta Post.
According to him, although adopting the IFRS is a matter of choices, but for those who refuse to adopt them especially those listed on stock exchanges will risk losing the trust from global investors.
He added that the IFRS was taken as the international accounting standard because it was easily
understood.
“Investors usually face difficulty reading the financial reports of foreign companies because the accounting standards vary for each country,” Finnegan said, adding that the IFRS also gave companies the advantages of a well-integrated information technology system, easier consolidation and reduced costs in making financial reports.
Endang Sulaksono, a representative of the Indonesian Publicly Listed Companies Association (AEI), said implementation of the new accounting standards posed challenges to local companies not only in terms of human resources but also in the adoption of technology.
“Even though the new standards will be able to reduce the costs of making financial reports, companies will have to make additional investments such as the procurement of a new IT system,” she said. (rch)
