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Jakarta Post

Garuda argues no flaws in its 2018 financial report

  • Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Thu, May 2, 2019   /   02:14 pm
Garuda argues no flaws in its 2018 financial report A Garuda Indonesia aircraft. (Shutterstock.com/e X p o s e)

Flag carrier Garuda Indonesia has stressed that there were no flaws in the company’s 2018 financial report, which had been criticized by two of the commissioners, saying that the report met the accountancy standards and abided by existing regulations.

 “It (the report) did not violate Financial Accounting Standard (PSAK) 23 because [under it], revenue can be included [in a financial report] before it is cashed,” according to Garuda in a statement received by The Jakarta Post, recently.

Previously, two commissioners — Chairal Tanjung, who represents PT Trans Airways and Dony Oskaria, who represented Finegold Resources Ltd — objected to the airline's financial report, particularly details on the revenue from a cooperation agreement with PT Mahata Aero Teknologi (US$239.94 million) and receivables from PT Sriwijaya Air ($28 million) in the 2018 fiscal year.

Garuda argues that according to PSAK 23, the income that can be included in financial reports includes that from the sales of goods and services and other recognized income such as royalties and dividends and other benefits that can be measured.

Garuda Indonesia finance director Fuad Rizal said the financial report had passed the check by auditors of Tanubrata Sutanto Fahmi Bambang & Partners, a member of BDO, one of the world’s big five accounting firms.

“The management believes the inclusion of revenue from compensation fees of transactions with Mahata is in line with accounting standards. As one of the big five audit firms, BDO should have abided by very good international auditing standards,” said Fuad.

Garuda's financial report to the Indonesia Stock Exchange (IDX) on April 1 recorded a net profit of US$809,846 in 2018, compared with a loss of $64.2 billion in 2017, but the two commissioners argued that without the inclusion of receivables from Sriwijaya Air and revenue from Mahata, the airline still recorded losses of $244.96 million in 2018.

Garuda Indonesia technical and service director Iwan Joeniarto said the cooperation with Mahata was a mutual partnership in connectivity and entertainment services on board. (bbn)