COMPARISON OF IFRS, US GAAP,

INDO GAAP

As an assignment for Intermediate Accounting 2

Rizqa Liaviani 0605003857
Sari Helena 0605003903
Shelly Aryani B. 0605003911
Steffi 060500397Y
Sulistiorini F. 0605004004

Faculty of Economy
University of Indonesia
2006 2007

Comparison Between IFRS, Indo GAAP, and US GAAP

Interim financial reporting
Stock exchange requirements
IFRS: The IASB does not require public entities to produce interim statements but does encourage
interim reporting - see additional guidance below.
Indo GAAP: Similar to IFRS, the Indonesian Institute of Accountant (IAI) does not mandate interim
statements. However, the Indonesian Capital Market Supervisory Board (BAPEPAM) requires listed
companies to submit half-yearly interim financial statements. Other regulators might require certain
industries to prepare interim financial statements. For example, Bank Indonesia requires interim
financial statements for the banking industry.
US GAAP: Similar to IFRS, the FASB does not mandate interim statements. However, if required
by the SEC, domestic US SEC registrants must follow APB 28 and comply with the specific
financial reporting requirements in Regulation S-X applicable to quarterly reporting, including
publication within 40 days (phasing to 35) of the quarter-end. SEC registrants must also include an
abbreviated management discussion and analysis of financial condition and results of operations.
Additional guidance
Additional guidance under all three frameworks is similar and includes the following:

Consistent and similar basis of preparation of interim statements, with previously reported
annual data and from one period to the next;

Use of accounting policies consistent with the previous annual financial statements,
together with adoption of any changes to accounting policies that it is known will be made
in the year-end financial statements (for example, application of a new standard).
Indonesian GAAP strongly recommended that changes in accounting principles be made
in the first interim period;

Under IFRS and US GAAP, preparation of the interim statements using a discrete
approach to revenue and expenditure recognition; that is, viewing the interim period as a
distinct accounting period, rather than part of the annual cycle. Incomplete transactions

must therefore be treated in the same way as at the year end. On the other hand,
Indonesian GAAP adopts the integral approach, in which the interim period is viewed as
an integral part of the annual period. Consequently, though most transactions are treated
the same way as the year end, there are several modifications on certain transactions, for
instances those related to estimation and forecast of full year performance;

Whilst US GAAP using discrete approach, it allows allocation between interim periods of
certain costs benefiting more than one of those periods, and deferral of certain cost
variances expected to be absorbed by year end;

The tax charge in all three frameworks is based on an estimate of the annual effective tax
rate applied to the interim results;

Summarized income statement (including segment revenue/profit), balance sheet, cash

flow statement, selected notes and statement of recognized gains and losses, except for
listed company in Indonesia, where a full set of financial statements must be submitted;
and

A narrative commentary. Under IFRS and US GAAP, comparatives for the balance sheet
are taken from the last annual financial statements. They also require that quarterly interim
reports must contain comparatives (other than for the balance sheet) for the cumulative
period to date and the corresponding period of the preceding year. Under Indonesian
GAAP comparatives for the interim statements are taken from the corresponding period of
the preceding year. Indonesian GAAP also requires interim income statement to contain
information for the cumulative period to date.

Segment reporting
All three frameworks have specific requirements about the identification, measurement and
disclosure of segment information. The similarities and differences are reflected in the table below.
General requirements
Scope
IFRS: Listed entities and entities in the process of listing. Non listed entities may choose full
compliance.

Indo GAAP: Similar to IFRS

US GAAP: Listed entities. Non-listed entities are encouraged but not required to comply.
Format
IFRS: Business and geographical reporting, one as primary format other as secondary. The choice
will depend on the impact on business risks and returns. The secondary format requires less
disclosure.
Indo GAAP: Similar to IFRS
US GAAP: Based on operating segments and the way the chief operating decision-maker
evaluates financial information for the purposes of allocating resources and assessing
performance.
Identification of segment
Aggregation of similar business/operating segments
IFRS: Five factors given to determine whether products and services are similar.
Indo GAAP: Similar to IFRS
US GAAP: The same criteria apply for the aggregation of similar operating segments.
Aggregation of similar geographical segments
IFRS: As for business/operating segments: six factors as given, focusing on economic and political
conditions, special risks, exchange control regulations and currency risks.
Indo GAAP: Similar to IFRS
US GAAP: Not specified. Certain disclosures (revenues and assets) are required, on a
consolidated GAAP basis, of domestic operations, foreign countries in total and each material
country.
Threshold for reportable segments
IFRS: Revenue, results or assets are 10% or more of all segments. If revenue of reported
segments are below 75% of the total, report additional segments until the 75% threshold is
reached.
Indo GAAP: Similar to IFRS
US GAAP: Similar to IFRS
Segments not reported
IFRS: Segments not identified as above are included as unallocated items.

Indo GAAP: Similar to IFRS

US GAAP: Included in all other category, with sources of revenue disclosed.
Maximum number of reported segments
IFRS: No limits
Indo GAAP: Similar to IFRS
US GAAP: Practical limit suggested at no greater than 10 segments.
Main disclosures
Factors used to identify reportable segments
IFRS: No specific disclosure required
Indo GAAP: Similar to IFRS
US GAAP: Required, including basis of organisation (for example, based on products and
services, geographic areas, regulatory environments) and types of product and service from which
each segment derives its revenues.
Composition of segments
IFRS: Disclose types of products and services included in each reported business segment and
composition of each geographical segment.
Indo GAAP: Similar to IFRS
US GAAP: Similar to IFRS
External and inter-segment revenue
IFRS: External revenue required. Inter-segment revenue in primary segment format only.
Indo GAAP: Similar to IFRS
US GAAP: Required on a consolidated GAAP basis, and on a segment GAAP basis but only if
included in the measurement of segment profit/loss for internal reporting.
Interest revenue and interest expense
IFRS: Not required
Indo GAAP: Not required
US GAAP: Required for reportable segments on segment GAAP basis, but only if included in the
measurement of segment profit/loss in internal reporting or otherwise regularly reported to chief
operating decision maker.

Income tax
IFRS: Not required
Indo GAAP: Not required
US GAAP: Required for reportable segments on segment GAAP basis, but only if included in the
measurement of segment profit/loss in internal reporting or otherwise regularly reported to chief
operating decision maker
Reference:

Similarities and Differences: A comparison of IFRS, Indonesian GAAP and US

GAAP, January 2005, KAP Haryanto Sahari & Rekan (Pricewaterhouse
Coopers)