Determination of the Use of Financial Accounting Standards for Rural Banks

To:
Board of Directors of Rural Banks at their place.

COPY

CIRCULAR LETTER OF THE FINANCIAL SERVICES AUTHORITY NUMBER 40 /SEOJK.03/2017

ABOUT

DETERMINATION OF THE USE OF FINANCIAL ACCOUNTING STANDARDS FOR RURAL BANKS

In connection with Financial Services Authority Regulation Number 48/POJK.03/2017 on Transparency of Financial Conditions of Rural Banks, hereinafter abbreviated as POJK TKK BPR (State Gazette of the Republic of Indonesia Year 2017 Number 154, Additional State Gazette of the Republic of Indonesia Number 6097), and in connection with the transfer of functions, duties, and authority for the regulation and supervision of financial services in the banking sector from Bank Indonesia to the Financial Services Authority, it is necessary to regulate again the implementation provisions regarding the determination of the use of financial accounting standards for BPR in a Circular Letter of the Financial Services Authority as follows:

I. GENERAL PROVISIONS

1. In order to improve the transparency of BPR's financial conditions and the preparation of relevant, comprehensive, reliable, and comparable financial reports, BPR prepares and presents financial reports based on the financial accounting standards applicable to BPR.

2. The financial reports that must be prepared by BPR as referred to in item 1 are the financial reports as referred to in Article 2 paragraph (1) of POJK TKK BPR.

3. The financial accounting standards currently used by the banking sector are Financial Accounting Standards Statement 50 Financial Instruments: Presentation and Disclosure (PSAK 50) and Financial Accounting Standards Statement 55 Financial Instruments: Recognition and Measurement (PSAK 55). However, the application of PSAK 50 and PSAK 55 is not in accordance with the operational characteristics of BPR and results in significant costs for BPR compared to the benefits obtained. Therefore, BPR requires financial accounting standards that are appropriate for the operational characteristics of BPR.

4. In connection with item 3 above, BPR uses the Financial Accounting Standards for Non-Public Accountability Entities (SAK ETAP) issued by the Financial Accounting Standards Board-Indonesian Institute of Accountants (DSAK-IAI). This is in line with the utilization of SAK ETAP, which can be applied to entities with significant public accountability, provided that the competent authority regulates the use of the aforementioned SAK ETAP.

5. Based on the above, the financial accounting standards for BPR use SAK ETAP.

6. With the implementation of SAK ETAP as the applicable financial accounting standard for BPR, the accounting guidelines for BPR financial transactions use the Rural Bank Financial Accounting Guidelines (PA BPR).

II. CLOSING

At the time this Circular Letter of the Financial Services Authority takes effect, the Circular Letter of Bank Indonesia Number 11/37/DKBU regarding the Determination of the Use of Financial Accounting Standards for Rural Banks is repealed and declared invalid.

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This copy is consistent with the original
Director of Law 1
Legal Department signed
Yuliana

The provisions in this Circular Letter of the Financial Services Authority take effect on the date of determination.

Determined in Jakarta on July 19, 2017

EXECUTIVE HEAD OF BANKING SUPERVISOR
FINANCIAL SERVICES AUTHORITY, signed
NELSON TAMPUBOLON