Financial Services Authority Regulation Number 6 of 2017 Regarding Accounting Treatment for Transactions Based on Electricity Sales and Purchase Agreements

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 6 POJK.04/2017
REGARDING
ACCOUNTING TREATMENT FOR TRANSACTIONS BASED ON ELECTRICITY SALES AND PURCHASE AGREEMENTS BY THE GRACE OF THE ALMIGHTY GOD, THE BOARD OF COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that the development of electricity infrastructure aims to ensure the availability of sufficient electricity in adequate quantities, good quality, and fair prices in order to improve the welfare and prosperity of the people fairly and evenly, as well as to realize sustainable development; b. that there is an urgency and significance in the need to provide electricity for public interest which is currently insufficient, so that the government implements a program to accelerate the development of electricity infrastructure in Indonesia;
c. that as part of the administration of government affairs, the Financial Services Authority needs to support the program to accelerate the development of electricity infrastructure;
d. that based on the considerations referred to in letters a, b, and c, it is necessary to FINANCIAL SERVICES AUTHORITY REPUBLIC OF INDONESIA

establish a Financial Services Authority Regulation regarding Accounting Treatment for Transactions Based on Electricity Sales and Purchase Agreements;

Recalling:

1. Law Number 8 of 1995 concerning Capital Markets (State Gazette of the Republic of Indonesia Year 1995 Number 64, Supplement to the State Gazette of the Republic of Indonesia Number 3608);
2. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
3. Presidential Regulation Number 4 of 2016 concerning the Acceleration of Electricity Infrastructure Development (State Gazette of the Republic of Indonesia Year 2016 Number 8) as amended by Presidential Regulation Number 14 of 2017 concerning Amendments to Presidential Regulation Number 4 of 2016 concerning the Acceleration of Electricity Infrastructure Development (State Gazette of the Republic of Indonesia Year 2017 Number 27);

DECIDES:
Establish: FINANCIAL SERVICES AUTHABILITY REGULATION REGARDING ACCOUNTING TREATMENT FOR TRANSACTIONS BASED ON ELECTRICITY SALES AND PURCHASE AGREEMENTS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following definitions apply:

1. Issuer is a Party that conducts a Public Offering.
2. Public Company is a Corporation whose shares are owned by at least 300 (three hundred) shareholders and have paid-in capital of at least Rp3,000,000,000.00 (three billion rupiah) or
   a number of shareholders and paid-in capital determined by Government Regulation.
3. Electricity Sales and Purchase Agreement is a concession, deed, contract, indenture, or other agreement related to or in connection with the provision of electricity carried out by:
   a. Issuers or Public Companies whose business activities are in the field of electricity supply for public interest and receive assignments based on Presidential Regulations for the acceleration of electricity infrastructure development, either as buyers or sellers of electricity; and b. Issuers or Public Companies whose business activities are in the field of electricity supply that conduct transactions with Issuers or Public Companies as referred to in letter a.

CHAPTER II
ACCOUNTING TREATMENT
Article 2
(1) The basis for preparing financial statements for Issuers or Public Companies is generally accepted accounting principles.
(2) Generally accepted accounting principles as referred to in paragraph (1) include:
a. Financial Accounting Standards issued by the Financial Accounting Standards Board (DSAK) of the Indonesian Accountants Association (IAI); b. Financial Accounting Standards issued by the Sharia Financial Accounting Standards Board (DSAS) of the Indonesian Accountants Association (IAI); and
c. financial accounting provisions established by the Financial Services Authority.
(3) In the event of differences between financial accounting standards as referred to in paragraph (2) letters a and/or b with financial accounting standards as referred to in paragraph (2) letter c, Issuers or Public Companies must apply the financial accounting standards as referred to in paragraph (2) letter c.

Article 3
Transactions based on Electricity Sales and Purchase Agreements are treated as sales and purchase transactions.

CHAPTER III
SANCTION PROVISIONS
Article 4
(1) Without prejudice to criminal provisions in the field of Capital Markets, the Financial Services Authority has the authority to impose administrative sanctions on any party that violates the provisions of this Financial Services Authority Regulation, including parties causing the violation, in the form of:
a. written warning; b. fine, namely the obligation to pay a certain amount of money;
c. restriction of business activities;
d. suspension of business activities; e. revocation of business license; f. cancellation of approval; and g. cancellation of registration.
(2) Administrative sanctions as referred to in paragraph (1) letters b, c, d, e, f, or g may be imposed with or without prior imposition of administrative sanctions in the form of written warnings as referred to in paragraph (1) letter a. (3) Administrative sanctions in the form of fines as referred to in paragraph (1) letter b may be imposed separately or concurrently with the imposition of administrative sanctions as referred to in paragraph (1) letters c, d, e, f, or g.

Article 5
In addition to administrative sanctions as referred to in Article 4 paragraph (1), the Financial Services Authority may take specific actions against any party that violates the provisions of this Financial Services Authority Regulation.

Article 6
The Financial Services Authority may announce the imposition of administrative sanctions as referred to in Article 4 paragraph (1) and specific actions as referred to in Article 5 to the public.

CHAPTER IV
TRANSITIONAL PROVISIONS
Article 7
(1) Issuers or Public Companies that conduct transactions as referred to in Article 3 are required to apply changes in accounting policy prospectively for fiscal years starting on January 1, 2017. (2) In the event that Issuers or Public Companies as referred to in paragraph (1) will apply changes in accounting policy earlier, Issuers or Public Companies may apply such changes in accounting policy prospectively for fiscal years starting on January 1, 2016.

Article 8
(1) In the event that assignments based on Presidential Regulations for the acceleration of electricity infrastructure development to Issuers or Public Companies have ended, Issuers or Public Companies are required to apply financial accounting standards as referred to in Article 2 paragraph (2) letters a and/or b prospectively. (2) The obligation to apply financial accounting standards as referred to in paragraph (1) is carried out against This copy is consistent with the original Legal Director 1 Legal Department signed Yuliana financial statements for fiscal periods after the expiration of assignments based on Presidential Regulations for the acceleration of electricity infrastructure development.

CHAPTER V
CLOSING PROVISIONS
Article 9
This Financial Services Authority Regulation takes effect on the date of enactment.
To be known by everyone, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.
Established in Jakarta on March 1, 2017
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY, signed
MULIAMAN D. HADAD
Enacted in Jakarta on March 2, 2017
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2017 NUMBER 37

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 6 /POJK.04/2017
REGARDING
ACCOUNTING TREATMENT FOR TRANSACTIONS BASED ON ELECTRICITY SALES AND PURCHASE AGREEMENTS

I. GENERAL
Along with continuous economic growth, there is a consequence of increasing electricity energy needs in Indonesia. The electricity infrastructure development program launched by the government aims to ensure the availability of electricity and is expected to improve the welfare and prosperity of the people fairly and evenly, as well as to realize sustainable development. In order to realize the program for the acceleration of electricity supply, the government has issued Presidential Regulation of the Republic of Indonesia Number 4 of 2016 concerning the Acceleration of Electricity Infrastructure Development as amended by Presidential Regulation of the Republic of Indonesia Number 14 of 2017. Furthermore, the Financial Services Authority, as part of the system of administration of government affairs that interacts well with other state and government institutions, needs to support this government program. Based on the authority as referred to in Article 69 of Law Number 8 of 1995 concerning Capital Markets, the Financial Services Authority can determine accounting provisions for transactions the provision of electricity in the context of accelerating the development of electricity infrastructure by establishing a Financial Services Authority Regulation regarding Accounting Treatment for Transactions Based on Electricity Sales and Purchase Agreements.

II. ARTICLE BY ARTICLE
Article 1
Clearly stated.
Article 2
Clearly stated.
Article 3
Although transactions as part of the implementation of Electricity Sales and Purchase Agreements contain substance other than sales and purchases, the aforementioned transactions are treated as sales and purchase transactions.
Article 4
Clearly stated.
Article 5
The term "specific actions" includes, among others, the postponement of the issuance of an effectiveness statement for public offerings.
Article 6
The Financial Services Authority may announce the imposition of administrative sanctions and specific actions through the Financial Services Authority website or the Financial Services Authority annual report.
Article 7
Clearly stated.
Article 8
Example of the application of changes in accounting policy prospectively for fiscal periods after the expiration of assignments:

Assignment ends in May 2020, so Issuers or Public Companies are required to apply changes in accounting policy prospectively for fiscal periods ending in 2021.
Article 9
Clearly stated.
SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6025