OJK Updates Provisions on the Preparation of Financial Statements by Securities Companies

The convergence of the National Financial Reporting Standards (Pernyataan Standar Akuntansi Keuangan/PSAK) with the second phase of the International Financial Reporting Standards has significantly impacted the prevailing Accounting Guidelines for Securities Companies (Pedoman Akuntansi Perusahaan Efek), which are now deemed to be irrelevant and inflexible in relation to the dynamic development of Financial Accounting Standards (Standar Akuntansi Keuangan – “SAK”).[1]

In a bid to accommodate these developments, provide greater comparability and implement the principle of substance over form in relation to the financial statements of securities companies, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) recently issued Regulation No. 20/POJK.04/2021 on the Preparation of Financial Statements by Securities Companies (“Regulation 20/2021”).[2] The newly promulgated regulation addresses various matters that relate to the preparation of financial statements by securities services, as well as applicable administrative sanctions, both of which are further elaborated upon in this edition of Indonesian Legal Brief (ILB). The promulgation of Regulation 20/2021 simultaneously repeals and replaces the following regulations:[3]