Foreign-owned companies in Indonesia need a financial reporting structure that meets Indonesian accounting and tax requirements while producing the information required by an overseas parent company. For a PT PMA, this requires selecting the applicable accounting standard and aligning local bookkeeping with its functional and group reporting currencies.
Which Accounting Standard Applies to the Indonesian Company?
Foreign-owned companies in Indonesia generally prepare their financial statements under the applicable Indonesian Financial Accounting Standards (SAK Indonesia), which are substantially aligned with IFRS but include Indonesian requirements.
Entities without public accountability that meet the applicable criteria may instead apply SAK Indonesia for Private Entities (SAK EP), which replaced SAK ETAP from 1 January 2025. Companies operating in regulated sectors may also face additional accounting and reporting requirements imposed by their sector regulator.
The applicable framework determines how transactions are recorded, valued, and disclosed in the company’s financial statements.
Setting up financial reporting for an Indonesian company? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
For multinational groups, the Indonesian reporting framework may differ from the accounting framework used by the parent company. The local accounts must support Indonesian financial statements while allowing the parent company to convert the figures into its group reporting format.
Can a PT PMA Keep Its Books in USD?
Indonesian companies generally maintain their bookkeeping in Bahasa Indonesia and use IDR. However, qualifying taxpayers, including PT PMAs, may obtain approval to maintain their books in English and USD.
This creates an important distinction between bookkeeping currency, functional currency, and group reporting currency. A company’s functional currency is determined by the economic environment in which it primarily operates. Indonesian rules determine which currency the company can use for its local bookkeeping, while its overseas parent may require financial information in another currency for consolidation.
A PT PMA that earns revenue and incurs major costs in USD may have different reporting requirements from an Indonesian subsidiary whose transactions are predominantly in IDR but whose parent consolidates its accounts in USD, EUR, or SGD.
Where local and group reporting use different currencies, the company must translate and reconcile the figures between the two reporting systems. The correct exchange rate depends on the transaction and reporting purpose; there is no single rate for every accounting conversion.
Foreign-owned companies dealing with this issue can refer to MAP Resources Indonesia’s guide to dual-currency bookkeeping in Indonesia for the underlying accounting considerations.
How Should Indonesian Accounts Map to Group Reporting?
A foreign-owned company does not necessarily need to abandon its parent company’s chart of accounts. The key question is whether the group structure captures the information required for Indonesian accounting and tax reporting.
Indonesian operations may need separate accounts for VAT, withholding taxes, and expenses with different corporate income tax treatments. If the parent company’s chart of accounts does not capture these items in enough detail, the Indonesian company can add local accounts or use a mapping structure rather than operating an entirely separate accounting system.
Need an Indonesian accounting structure that works with your group reporting? Email MAP Resources Indonesia at info@mapresourcesindonesia.com
This becomes particularly important during group audit consolidation, when the Indonesian subsidiary may need to provide local financial statements together with reporting adjustments required under the parent company’s accounting framework.
Companies must retain books, accounting records, and supporting documents in Indonesia for 10 years. The accounting system should allow transactions reported in financial statements and tax filings to be traced to invoices, contracts, payment records, tax documents, and other supporting evidence.
Indonesia is also moving toward more integrated corporate financial reporting. A national financial reporting framework introduced in 2025 includes the phased Shared Financial Reporting Platform (PBPK), while separate corporate reporting rules require annual-report approvals to be submitted electronically through the government’s company administration system. Foreign-owned companies should ensure their accounting systems can produce the financial information required as these reporting processes are implemented.
When Does the Indonesian Company Need an Audit?
An Indonesian company may be required to have its annual financial statements audited by a public accountant where it meets a statutory audit trigger, including companies that collect or manage public funds, issue debt instruments to the public, or meet the applicable financial threshold.
Under the Company Law, one trigger applies where a company has assets and/or annual business revenue of at least IDR 50 billion (USD 2.84 million). Foreign ownership by itself does not automatically mean that every PT PMA is subject to a statutory annual audit.
Where the Indonesian company is also included in an overseas group audit, the local audit and group reporting timetable may need to operate together.
Building a Reporting Structure That Works in Indonesia
MAP Resources Indonesia supports foreign-owned companies in structuring their Indonesian accounting and financial reporting. Contact us at info@mapresourcesindonesia.com.
