The convergence period (2007-present)

         As the development of Indonesian accounting standards since 1994 has followed the progress of the international accounting standard setting, the international convergence of IFRS inevitably affects the DSAK’s strategy in formulating Indonesian accounting standards. Since the publication of the 2007 codified Indonesian accounting standards pronouncement, the IAIhas stated its support to the IASB convergence programme. However, it was not until 23 December 2008 did the IAI announce its formal statement that Indonesian accounting standards would fully converge with IFRS with the expected completion date by 1 January 2012 (Deloitte Touche Tohmatsu, 2009). This marked the beginning of a period of transition to IFRS, a process that still continues until presently. In this convergence period, an ultimate goal to achieve full convergence between Indonesian national standards and IFRS has directed the sequence of events in the Indonesian accounting standard setting agenda. Accordingly, the Indonesian accounting standards have moved significantly closer to IFRS compared to the previous period.

Generally Accepted Accounting Principles

          The accounting profession has developed standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP). These standards indicate how to report economic events.

        The Securities and Exchange Commission (SEC) is the agency of the U.S. goverment that oversees U.S. financial markets and accounting standard-setting bodies. The primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB). Many contries outside of the United States have adopted the accounting standards issued by the International Accounting Standards Board (IASB). In recent years the FASB and IASB have worked closely to try to minimize the differences in their standards.