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2013/SOM3/EC/PD2/002
From “Cameral Bookkeeping” to Accrual (IPSAS)
Governmental Accounting: Indonesian Experience
Submitted by: Indonesia
Policy Discussion on International Public
Sector Accounting Standards
Medan, Indonesia
28 June 2013
7/4/2013
PRESENTED TO POLICY DIALOGUE ON IPSAS
APEC ECONOMIC COMMITTEE MEETING
Medan, June 28, 2013
A.B. Triharta
(VICE CHAIRMAN OF INDONESIA GOVERNMENT ACCOUNTING STANDARDS COMMITTEE)
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TRANSFORMATION OF GOVERNMENT FINANCIAL MANAGEMENT SYSTEMS IN INDONESIA INDISCHE COMPTABILITEITSWET
(ICW) OF 1925 (1883)
DEMANDING ACCOUNTABILITY & TRANSPARENCY
NEW PUBLIC MANAGEMENT (NPM):
REFORM OF PUBLIC FINANCIAL MANAGEMENT
(STATE FINANCE LAW OF 2003, TREASURY LAW OF 2004, STATE AUDUT LAW OF 2004
RELIABLE GOVERNMENT FINANCIAL STATEMENTS
GOVERNMENT ACCOUNTING STANDARDS (GAS)
VALUE ENHANCEMENT
(MOVING TO ACCRUAL ACCOUNTING)
F
I
N
A
N
C
I
A
L
C
R
I
S
I
S
1
9
9
7
2
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INDONESIA GOVERNMENTAL ACCOUNTING STANDARDS
• The Treasury Law No. 1 Year 2004 states that
the Indonesian Governmental Accounting
Standards are on accrual basis.
• The government issued the Government
Regulation No. 24 year 2005 on the Cash
towards Accrual (CtA) Government Accounting
Standards.
• Which accrual basis:
• IPSAS or
• GAAP?
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INDONESIAN GOVERNMENT ACCOUNTING STANDARDS (Government Regulation No. 24 Year 2005) MAIN REFERENCES
International Public Sector Accounting Standards –
(IPSAS) exposure drafts
Government Accounting Standards exposure draft (MOF,
2001)
Financial Accounting Standards (IAI)
Governmental Accounting Standards (GASB)
Financial Accounting Standards (FASB)
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GAP ANALYSIS: IPSAS VS IGAS (INDONESIA GOVERNMENTAL ACCOUNTING STANDARDS)
• Dec 2009 up to March 2010:
Prof Andreas Bergmann and Braun Robin from
Zurich School of Management and Law (ZhAw)
conducted a study of Gap Analysis between
IGAS compared to IPSAS:
The most important facts
• Comparison of IGAS (Gov. Regulation no. 24 Year
2005) with 26 standards of accrual IPSAS (2008)
• IPSAS as a benchmark
• Each standard was analyzed on the situation in
Indonesia
• Small gaps only.
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GAP ANALYSIS: IPSAS VS IGAS (INDONESIA GOVERNMENTAL ACCOUNTING STANDARDS)
Potential In-country value added through adopting IPSAS:
• Substantial convergence between IGAS in IPSAS in
many areas Æ small gaps only
• Probably most important: full implementation of
depreciation
• Another high priority: Harmonization of the CoA
(budgettary, Accounting, and GFS (Government
Financial Statistics)
• Most important gap between IGAS and IPSAS:
Revenues from Non-Exchange Transactions
• Indonesia as a country has no legacy in government
accounting Æ but, Indonesia is nowadays on the
brighter side.
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FULL ACRUAL IPSAS
22 OCTOBER 2010
Government Regulation No. 71 Year 2010
Æ stipulating the full IPSAS accrual
accounting, at the latest by the budget year
2015
Æ Applicable to central as well as local
government entities (+ 80 central gov.
entities, and 524 local gov. entities)
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FULL ACRUAL IPSAS
Government Regulation No. 71 Year 2010
NOTABLE ISSUES:
• BUDGET IS CASH BASIS,
Budget Realization Report is on cash basis
• ACCOUNTING REPORTS ARE ON FULL
ACCRUAL BASIS
• Balance Sheet
• Statement of Operation
• Statement of Changes in Equity
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7/4/2013
IPSAS ADOPTION IN INDONESIA: THROUGH NATIONAL STANDARDS
IPSAS
Legislation refers
to IPSAS
National Standards
based on IPSAS
Legislation refers
to National Standard
Accounting
Manual
Implementation
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INDONESIA GOVERNMENT ACCOUNTING STANDARDS
Conceptual
Framework
Governments Accounting Standard
Statement of
standards
Standards
Interpretation
Technical
Bulletin
Prepared by IGAS Committee
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KSAP‐KOMITE STANDAR AKUNTANSI PEMERINTAH
(INDONESIA GOVERNMENT ACCOUNTING STANDARDS COMMITTEE)
PRODUCTS
COMMITTEE
GOVERNMENT ACCOUNTING STANDARD COMMITTEE
(Established based on Presidential Decree)
Consultative Committee
Working Committee
Working Group
GOVERNMENT REGULATION #24 OF 2005:
GOVERNMENT REGULATION #71 OF 2010:
GOVERNMENT ACCOUNTING
STANDARDS
GOVERNMENT ACCOUNTING
STANDARDS
CASH TOWARD ACCRUAL BASIS
ACCRUAL BASIS
1. Conceptual Framework 1. Conceptual Framework
2. 11 Statement of 2. 12 Statement of Accounting Standards
Accounting Standards
3. 12 Technical Bulletins
4. 3 Accounting Standard Interpretation
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Summary of GOVERNMENT ACCOUNTING STANDARDS & FINANCIAL STATEMENTS (TRANSFORMATION)
GOVERNMENT REGULATION #24 OF 2005:
GOVERNMENT REGULATION #71 OF 2010:
GOVERNMENT ACCOUNTING
STANDARDS
GOVERNMENT ACCOUNTING
STANDARDS
CASH BASIS CAMERAL BOOKKEEPING
CASH TOWARD ACCRUAL BASIS
ACCRUAL BASIS
Budget Realization Statements
GOVERNMENT FINANCIAL STATEMENS Budget Realization Statements
Balance Sheet
Cash Flow Statements
Notes of Financial Statements GOVERNMENT FINANCIAL STATEMENS Budget Realization Statements
SAL Statement
Balance Sheet
Operational Report
Equity Statement
Cash Flow Statements
Notes of Financial Statements
INDISCHE COMPTABILITEITSWET
(ICW) OF 1925
a.
b.
c.
d.
VALUE ENHANCEMENT
a.
b.
c.
d.
e.
f.
g.
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CURRENT GOVERNMENT FINANCIAL STATEMENTS AND ACCOUNTING STANDARDS
(OPINION)
GOVERNMENT REGULATION #71 of 2010 :
GOVERNMENT ACCOUNTING STANDARDS
AUDIT
SUPREME AUDIT BOARD
CASH TOWARD ACCRUAL BASIS
OPINION
“DISCLAIMER OPINION”
2004‐2008
CENTRAL GFS
(CONSOLIDATED MINISTRY & AGENCY FS)
“QUALIFIED OPINION”
2009‐2012
LOCAL GFS: NEXT SLIDE
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GOVERNMENT FINANCIAL STATEMENTS AND ACCOUNTING STANDARDS (OPINION)
1. Opinion of Supreme Audit Board on Ministry’s & Agency’s Financial Statements
Year
2006
2007
2008
2009
2010
2011
2012
Unqualified
∑
%
7
9
14
18
34
41
44
56
52
63
67
77
69
74
Opinion
Qualified
Disclaimer
∑
%
∑
%
36
46
36
46
32
40
33
41
31
37
18
22
26
33
8
10
29
35
2
2
18
21
2
2
22
24
2
2
Adverse
∑
%
0
1
0
0
0
0
0
0
1
0
0
0
0
0
2. Opinion of Supreme Audit Board on Local Government Financial Statements
Year
2006
2007
2008
2009
2010
2011*)
Unqualified
∑
%
3
1
4
1
13
3
15
3
34
7
67
15
Opinion
Qualified
Disclaimer
∑
%
∑
%
327
70
105
23
283
60
123
26
323
67
118
24
330
65
111
22
341
65
123
23
320
74
6
1
Source: Summary of Audit Result of Supreme Audit Board for Semester I
*) Opinion up to Semester II 2012
Adverse
∑
%
28
6
59
13
31
6
48
10
26
5
42
10
14
7
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Some Benefit of Adopting IPSAS
Accrual Accounting Basis
• More transparent and accountable government financial reports
• Basis for further improvement:
– budgetting: From line items Æ performance based
– Government Financial Statistics is based on accrual • Reputation effect: obviously not exclusively attributable to accrual accounting: Rating agencies take government financial reports into consideration as one of the elements. Capital markets are increasingly on alert about financial reporting issues.
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Accrual accounting is not "an end in itself, but rather, as a means of shifting the emphasis of the budgetary process away from cash inputs, towards outputs and outcomes, in the hope that this will result in greater management efficiencies, and hence, better outcomes for Governments and the communities they serve" (Carlin and Guthrie, 2000)
THANK YOU
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