The ratification of PPSAK 13 (Revocation of Statement of Financial Accounting Standards) as of August 11, 2019, non-profit oriented entities no longer refer to PSAK 45 concerning Financial Reporting of Non-Profit Organizations. The presentation of non-profit entity reports will refer to ISAK 35 concerning Presentation of Non-profit Oriented Entities Financial Statements effective as of January 1, 2020. This article written by Andini Novriska Putri, Associate Accounting & Tax, KAP Agus Ubaidillah dan Rekan (TGS AU Partners).

This ISAK 35 is an interpretation of the amendments to PSAK 1 concerning the Presentation of Financial Statements paragraph 5 which states “This statement uses terminology suitable for profit-oriented entities, including public sector business entities. If an entity with non-profit activities in the private or public sector applies this Standard, it may need to adjust the description used for certain items in the financial statements and the financial statements themselves.

This interpretation is applied to non-profit oriented entities regardless of the legal entity form of the entity and can be applied to non-profit entities that use the Financial Accounting Standards for Entities Without Public Accountability (SAK ETAP).

The interpretation of this Financial Accounting Standard is as follows:

1. The presentation of the financial statements of non-profit oriented entities is prepared by taking into account the requirements for the presentation of financial statements, the structure of the financial statements and the minimum requirements for the content of the financial statements as stipulated in PSAK 1: Presentation of Financial Statements.

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2. Non-profit oriented entities may make adjustments to the descriptions used for certain items in the financial statements. For example, if a resource received by a non-profit oriented entity requires the entity to meet the conditions attached to the resource, the entity can present the amount of the resource based on its nature, namely with restrictions or without restrictions by the employer.

3. Non-profit oriented entities may also adjust the description used for the financial statements themselves. For example, an adjustment to the use of the title “statement of changes in net assets” rather than “statement of changes in equity”. Adjustments to the title of the financial statements are not limited as long as the title reflects a function that is more in line with the content of the financial statements.

4. Non-profit entities must still consider all relevant facts and circumstances in presenting their financial statements, including the notes to the financial statements, so as not to reduce the quality of the information presented in the financial statements.

The presentation of financial statements of non-profit oriented entities includes statements of financial position, statements of comprehensive income, statements of changes in net assets, statements of cash flows and notes to financial statements.