New Financial Accounting Standard for Private Entities (SAK EP)

Effective January 1, 2025, the Financial Accounting Standards Board of the Indonesian Institute of Accountants (“DSAK-IAI”) has implemented the Financial Accounting Standards for Private Entities (“SAK EP”), replacing the current SAK ETAP for non-publicly accountable entities. Early adoption has been permitted since January 1, 2022.

Overview

SAK EP is based on the 2015 IFRS for SMEs and is designed for private entities without public accountability. It provides a middle ground between the full SAK (based on full IFRS) and SAK EMKM (for micro, small, and medium entities), offering simplified yet comprehensive reporting requirements tailored to private companies.

Starting in 2025, Indonesia will implement four accounting frameworks:

SAK (Standar Akuntansi Keuangan Umum) – General Financial Accounting Standards, based on full IFRS
SAK EP (Entitas Privat) – Financial Accounting Standards for Private Entities, based on IFRS for SMEs (2015)
SAK EMKM (Usaha Mikro, Kecil, dan Menengah) – For Micro, Small, and Medium-Sized Entities
SAK Syariah – Financial Accounting Standards for Sharia Entities

Key Features of SAK EP

SAK EP offers a simplified framework tailored for private entities. It excludes complex topics such as earnings per share, interim reporting, and segment disclosures, making it more accessible for non-publicly accountable companies. The standard mandates a single accounting policy for most transactions, reducing the burden of policy selection.

It also requires fewer, more relevant disclosures and uses clearer language and simplified valuation principles. Additionally, SAK EP is updated less frequently than full SAK, providing greater stability for preparers.

SAK EP vs. Full SAK (At a Glance)

FEATURE	SAK EP	FULL SAK
Basis	IFRS for SMEs (2015)	Full IFRS
Target	Private Entities	Public Entities
Complexity	Simplified	Comprehensive
Disclosures	Limited	Extensive
Revenue Recognition	Simple Model	IFRS 15 (5-step)

Transition Considerations

Entities applying SAK ETAP must assess whether to transition to SAK EP or full SAK. Moving back to SAK ETAP is not permitted. The transition may impact revenue recognition, lease accounting, and impairment assessments, affecting financial performance and strategic decisions. Failure to comply may result in regulatory risks, audit issues, or tax complications. Preparation may require restating prior financials, updating systems, and staff training.

Rödl & Partner’s Support

Rödl & Partner is committed to supporting your organization throughout the transition to SAK EP. Our services include conducting gap assessments to identify key differences, providing hands-on implementation support, delivering targeted staff training, and offering ongoing technical advice. Our objective is to ensure a smooth and efficient transition while enhancing the quality, accuracy, and compliance of your financial reporting.