Bank Indonesia (BI) has issued Circular No. 11/33/DPNP to set out the amendments to a previous Circular, No. 11/4/DPNP, which addresses matters relating to the implementation of accounting guidelines for the banking sector in Indonesia. This new circular amends Chapter III Number 2 concerning transitional provisions with the addition of one letter, D. This amendment is included as an attachment to the circular.
The amendment deals specifically with estimation of Collective value Depreciation with reference to specific loss experiences. The guidelines on this point only apply to credit assets and which are categorized as collective impairment. Management can undertake self-assessment in determining the estimated depreciation of credit assets. Nevertheless, there is an obligation to have these estimates verified by a public accountant. The public accountant will determine whether the self-assessment is reasonable.
The circular sets out how the estimates are to be calculated and the conditions that must be met. The specific standards are stipulated in Standard Financial Accounting Statement No. 55 (Revision 2006), particularly Paragraphs 63 and 102 - 105.
The sanctions for breach of the provisions of this circular are those stated in the BI Regulations relating to transparency at banks.
The circular is current as of 8 December 2009. However, the provisions do not come into force until 1 January 2010.
Bank Indonesia (BI) has issued Circular No. 11/33/DPNP to set out the amendments to a previous Circular, No. 11/4/DPNP, which addresses matters relating to the implementation of accounting guidelines for the banking sector in Indonesia. This new circular amends Chapter III Number 2 concerning transitional provisions with the addition of one letter, D. This amendment is included as an attachment to the circular.
The amendment deals specifically with estimation of Collective value Depreciation with reference to specific loss experiences. The guidelines on this point only apply to credit assets and which are categorized as collective impairment. Management can undertake self-assessment in determining the estimated depreciation of credit assets. Nevertheless, there is an obligation to have these estimates verified by a public accountant. The public accountant will determine whether the self-assessment is reasonable.
The circular sets out how the estimates are to be calculated and the conditions that must be met. The specific standards are stipulated in Standard Financial Accounting Statement No. 55 (Revision 2006), particularly Paragraphs 63 and 102 - 105.
The sanctions for breach of the provisions of this circular are those stated in the BI Regulations relating to transparency at banks.
The circular is current as of 8 December 2009. However, the provisions do not come into force until 1 January 2010.
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