Riset Pajak dan Akuntansi | Dwi Martani Paper Adri Present
ANALYSIS PSAK 24 (2013)
IMPLEMENTATION
IN INTERIM FINANCIAL REPORT 2015
Muhammad Adri Hakim and Dwi Martani
Agenda
Introduction
Literature Review
Research Method
Result and Analysis
Conclusion and Implication
2
Introduction – background
• PSAK 24 Employee Benefit – changes in 2013 and effective in
2015. PSAK 24 (2013) is the adoption of IAS 19 Revised 2011.
• Each company have employees, so this standard relevant for all
companies.
• PSAK 24 had an impact on the presentation of reclassification and
so the company had to apply the new method retrospectively.
– the company would present three statements of financial position
comparative year are 2015, 2014 and early comparative period of
2014.
– Changes in PSAK 24 will also produce other comprehensive income
(OCI) that reported in statement of income and other comprehensive
income and also OCI in equity. Based on PSAK 24, gain or loss of
actuarial recognized in OCI.
3
Introduction – background
• Fasshauer et al., (2008) conducted a study on the implementation of
accounting standards, IAS 19 Employee Benefit, on companies in 20
European countries.
• The companies are analyzed using three methods in the
measurement of employee benefits:
– full recognition through the Statement of Recognized Income and
Expense (SORIE) (ie through shareholders’ equity)
– full recognition through Profit & Loss (P&L), or
– the ‘standard’ corridor approach
• The results of these studies show that companies that apply IAS 19
that uses the latest full recognition method through the Statement of
Recognized Income and Expense (SORIE) better in disclosing
information related to employee benefits.
4
Introduction – background
• Harahap (2010) had research about the decision to adopt
and implementing PSAK 24 (1999).
– Larger company tends to be faster in applying PSAK 24
– Estimated implementation cost later applying
– Debt agreement does not affect the timing of adoption
– Companies with positive changes ROE would be faster to apply
PSAK 24, and
– Company that audited by big public accounting firms (Big 4),
faster in adoption of PSAK 24.
5
Literature Review – PSAK 3
PSAK 3
• Interim report is a financial reporting that have shorter periode than
a full financial year.
• According to PSAK No. 3 (2010) Interim Financial Reporting,
interim financial report is a financial report that contains either a
complete financial statement (as described in PSAK 1 (2009)
Presentation of Financial Statements) or a financial report
summary (as described in this Statement) to an interim period.
• Based on PSAK 3, the interim financial statements are prepared
using the same accounting policies with the annual financial
statements.
• The new standard should be implemented on first interim report not
only for the annual financial report.
6
Introduction – research objective
• This research aims to analyze how the implementation of
PSAK 24 changes in the interim financial report 2015.
• Using interim financial report will be interesting because
there are many companies that turned out to not apply it
in the beginning of the interim period, even though the
application of IAS 24 Revised 2013 effective starting
January 1, 2015.
• Based on Hararap (2010), this paper will analyze the
companies characteristic that influence of PSAK 24
implementation.
7
Literature Review
Employee Benefit
• Employee benefits are all forms of benefits granted an entity in
exchange for services rendered by employees or for the termination of
the employment contract.
• Employee benefits include benefits granted to workers or their
dependents or beneficiaries and may be settled by payments (or the
provision of goods or services). The type of employee benefit:
– Short tem employee benefit
– Long tem employee benefit
– Post employee benefit
– Termination benefit
– Stock option (out of scope PSAK 24; will be regulated on PSAK 53)
8
Literature Review – PSAK 24
PSAK 24
• There are three major changes in the PSAK 24 (2013) – only for defined
benefit plan (long term and post employee benefit) :
– Calculation pension cost– current cost, net interest and past service cost
using single interest cost parameter.
– The recognition of actuarial gains and losses – part of the other
comprehensive income
– Additional disclosures.
• Revised PSAK 24 will have an impact on the presentation of
reclassification and so companies should apply retrospectively using
the new method. According to PSAK 25 (accounting policies, changes
in accounting policies, estimates and correction of errors), the
companies should restate financial statements have been published .
9
Literature Review – research on accounting changes
• Investor focused on large, so companies tend to be
applying accounting policies early (Castello et al. 1994).
• Companies that have larger debts will perform faster
adoption of standards (Sami and Welsh, 1992) but
according Castello et al. (1994) actually found the opposite -
contracting theory
• Company audited by big four - (Trombley, 1989).
• Harahap (2010) found that the total assets, changes in ROE
and auditors have a positive influence on the early adoption
of accounting standards.
10
Literature Review – hyphotesis 1
• Investors generally invest focused on the companies that have
big capitalization.
• Financial statement including interim financial report are very
important information in the decision making for investors and
prospective investors.
• The company should pay more attention to information presented
in the interim financial statements if they have a big market
capitalization.
• H1: Companies with larger market capitalization have the
possibility in implementing PSAK 24 (2013) earlier
11
Literature Review – hyphotesis 2
• Companies with a large number of employees, tend to
spend more for employee expense and have more liability
related to employee benefit.
• PSAK 24 more relevant to companies that have more
employees.
• Companies with larger number of employees is expected
to be faster in applying PSAK 24 (2013) because the
standard is closely related to the company's obligation to
its employees and also government regulations relating to
the welfare of employees.
• H2: Companies with a larger number of employees
have possibility in implementing PSAK 24 (2013)
earlier.
12
Literature Review – hyphotesis 3
• To run its business activities the company needs funds from creditor.
• The companies that have high debt equity ratio should have more
accountability and transparency, because creditor need the information
to analyze the credit investment.
• The application of IAS 24 Revised 2013 influence to changes in the
value of liabilities and equity.
• Companies with a larger debt to equity is expected to be faster in
applying IAS 24 Revised, 2013. The companies wanted to disclose
impact of changes in accounting standard earlier to creditors.
• H3: Companies with a larger Debt to Equity Ratio (DER) have
possibility in implementing PSAK 24 (2013) earlier.
13
Literature Review – hyphotesis 4
• Harahap (2010) found that companies that have large changes
of return on equity (ROE) would adopted PSAK 24 earlier.
• PSAK 24 result significance change in equity because
unrealized gain or loss actuarial will present as part of equity. If
the company have unrealized actuarial losses, the total equity
will decrease.
• The company with the change of positive ROE (favorable) is
expected to be faster in applying PSAK 24 (2013).
• H4: Companies with a larger change in Return On Equity
(ROE) have possibility in implementing PSAK 24 (2013)
earlier.
14
Literature Review – hyphotesis 5
• Harahap (2010) also mentions that companies audited by public
accounting firms were great also faster in applying PSAK 24
(2013).
• Large public accounting firm will generally be offered to clients to
implement the new standards as soon as possible, due to
maintain its reputable and quality of services to client.
• Large public accounting firms have a better understand of new
accounting standards than small ones. Generally big four
accounting firm issue module and give a training of the new
standards
• The companies audited by big four accounting firms are expected
to be faster in implementing PSAK 24 (2013).
• H5: Companies audited by a public accountant's office "Big
4" have possibility in implementing PSAK 24 (2013) earlier.
15
Research Method
•
•
Descriptive analysis
This research uses regression model similar to the regression model
on research Harahap (2010) with modifications.
Adoption Timingi = α0 + α1CAPi + EMPLOYEEi + α3DERi +
α4ROECHANGEi + α5AUDITORi + εi
Adoption
Timing
: Dummy variable, the value 1 to companies that adopt PSAK
24 (2013) of the interim financial statements and the value 0
for companies that do not adopt in the interim financial report
2015
CAP
: The market capitalization value in 2015
EMPLOYEE
: The number of employees of the company in 2014
DER
: Debt to Equity Ratio 2014
ROECHANGE : Return On Equity change from 2013 to 2014
AUDITOR
: Dummy, value 1 to companies audited by audit firms "Big 4"
and the value 0 for companies that are not audited by audit
firms "Big 4"
16
Result and Discussion - Data
Criteria
Companies listed in the Indonesia Stock
Exchange until December 31, 2015
518
The company which is newly registered in 2015
13
Companies that do not submit the Financial
Statements 2014
Companies with incomplete data
Total Observations (Sample)
•
•
Amount of
Companies
15
3
487
The research use the listed companies in the Indonesia Stock
Exchange (IDX) until December 31, 2015.
Purposes sample with criteria:
• Listed from Jan, 1 2015 and 2014
• Have financial statement and interim report
17
Result and Analysis Variabel
N
Independent Variable:
CAP (Jutaan)
487
EMPLOYEE
487
DER
487
ROECHANGE
487
Variabel Dummy:
Variabel
N
Dependent Var - Adoption
Q1
487
Q2
487
Q3
487
Independent Variable:
AUDITOR
487
Mean
9.211.790
3.577,40
1,49
0,52
Standard
Deviation
35.842.644
10.287,56
5,22
66,14
Minimum
10.200
2
-64,71
0,01
Maximum
437.355.969
156.097,00
28,19
946,3
Sample Conditions
Amount
Percentage
Applied (1)
Not yet Applied (0)
Applied (1)
Not yet Applied (0)
Applied (1)
Not yet Applied (0)
72
415
115
372
194
293
14,80%
85,20%
23,60%
76,40%
39,60%
60,40%
Audited by BIG 4 (1)
Not Audited by BIG 4 (0)
191
296
39,20%
60,80%
18
Data and Analysis
Q1
Description
Q2
Q3
B
Sig
B
Sig
B
Sig
CAP
0,458
0,000**
0,452
0,000**
0,372
0,000**
EMPLOYEE
0,051
0,134
0,066
0,035**
0,054
0,083*
DER
-0,010
0,847
-0,030
0,534
-0,022
0,590
ROE
0,008
0,492
0,002
0,826
0,000
0,972
AUDITOR
0,393
0,183
0,060
0,812
0,275
0,202
Observation
Prob>Chi-Square
N R-sq
487
487
487
0
0
0
22,10%
23,00%
20,20%
19
Data and Analysis - sensitivity
Description
Q1
Q2
Q3
Coefficient
P value
Coefficient
P value
Coefficient
P value
EMPLOYEE
0,137
0,000**
0,152
0,000**
0,135
0,000**
DER
0,002
0,962
-0,016
0,718
-0,013
0,730
ROE
0,001
0,935
-0,003
0,712
-0,005
0,565
AUDITOR
0,716
0,011**
0,393
0,097*
0,537
0,008**
Observasi
Prob>Chi-Square
N R-sq
487
487
487
0
0
0
13,50%
13,10%
11,7
20,20%
20
Conclusion
Conclusion
There are many companies that have not applied PSAK 24 (2013) in interim
•
•
financial statements, even until the third quarter (Q3) 2015.
In Q1 there are 72 companies;
Q2 cumulatively there are 115 companies that have applied, while 372
companies have yet to implement.
In Q3 cumulatively There are 194 companies that have applied and 293
companies have not implemented.
Despite the increase of the company applying the PSAK 24 (2013) in an
interim financial report in 2013, but the company did not apply the amount
still greater.
Market capitalization and number of employees have significant effect on the
application of PSAK 24 (2013) in the interim financial statements of 2015.
The results of the sensitivity test showed that the auditor has significant
influence in the company's consideration to apply PSAK 24 (2013) in interim
financial statements.
21
Conclusion
Implication
•
Regulators should provide more oversight or, if necessary sanctions
for companies that do not implement the standard as appropriate.
•
The standard setters are expected to promote new standard to
financial statements prepare
Further Research
•
Analyze PSAK 24 on annual financial statement 2015
•
Impact the changes in the quality of financial statement
•
Value relevance of changes in PSAK 24
22
THANK YOU
23
IMPLEMENTATION
IN INTERIM FINANCIAL REPORT 2015
Muhammad Adri Hakim and Dwi Martani
Agenda
Introduction
Literature Review
Research Method
Result and Analysis
Conclusion and Implication
2
Introduction – background
• PSAK 24 Employee Benefit – changes in 2013 and effective in
2015. PSAK 24 (2013) is the adoption of IAS 19 Revised 2011.
• Each company have employees, so this standard relevant for all
companies.
• PSAK 24 had an impact on the presentation of reclassification and
so the company had to apply the new method retrospectively.
– the company would present three statements of financial position
comparative year are 2015, 2014 and early comparative period of
2014.
– Changes in PSAK 24 will also produce other comprehensive income
(OCI) that reported in statement of income and other comprehensive
income and also OCI in equity. Based on PSAK 24, gain or loss of
actuarial recognized in OCI.
3
Introduction – background
• Fasshauer et al., (2008) conducted a study on the implementation of
accounting standards, IAS 19 Employee Benefit, on companies in 20
European countries.
• The companies are analyzed using three methods in the
measurement of employee benefits:
– full recognition through the Statement of Recognized Income and
Expense (SORIE) (ie through shareholders’ equity)
– full recognition through Profit & Loss (P&L), or
– the ‘standard’ corridor approach
• The results of these studies show that companies that apply IAS 19
that uses the latest full recognition method through the Statement of
Recognized Income and Expense (SORIE) better in disclosing
information related to employee benefits.
4
Introduction – background
• Harahap (2010) had research about the decision to adopt
and implementing PSAK 24 (1999).
– Larger company tends to be faster in applying PSAK 24
– Estimated implementation cost later applying
– Debt agreement does not affect the timing of adoption
– Companies with positive changes ROE would be faster to apply
PSAK 24, and
– Company that audited by big public accounting firms (Big 4),
faster in adoption of PSAK 24.
5
Literature Review – PSAK 3
PSAK 3
• Interim report is a financial reporting that have shorter periode than
a full financial year.
• According to PSAK No. 3 (2010) Interim Financial Reporting,
interim financial report is a financial report that contains either a
complete financial statement (as described in PSAK 1 (2009)
Presentation of Financial Statements) or a financial report
summary (as described in this Statement) to an interim period.
• Based on PSAK 3, the interim financial statements are prepared
using the same accounting policies with the annual financial
statements.
• The new standard should be implemented on first interim report not
only for the annual financial report.
6
Introduction – research objective
• This research aims to analyze how the implementation of
PSAK 24 changes in the interim financial report 2015.
• Using interim financial report will be interesting because
there are many companies that turned out to not apply it
in the beginning of the interim period, even though the
application of IAS 24 Revised 2013 effective starting
January 1, 2015.
• Based on Hararap (2010), this paper will analyze the
companies characteristic that influence of PSAK 24
implementation.
7
Literature Review
Employee Benefit
• Employee benefits are all forms of benefits granted an entity in
exchange for services rendered by employees or for the termination of
the employment contract.
• Employee benefits include benefits granted to workers or their
dependents or beneficiaries and may be settled by payments (or the
provision of goods or services). The type of employee benefit:
– Short tem employee benefit
– Long tem employee benefit
– Post employee benefit
– Termination benefit
– Stock option (out of scope PSAK 24; will be regulated on PSAK 53)
8
Literature Review – PSAK 24
PSAK 24
• There are three major changes in the PSAK 24 (2013) – only for defined
benefit plan (long term and post employee benefit) :
– Calculation pension cost– current cost, net interest and past service cost
using single interest cost parameter.
– The recognition of actuarial gains and losses – part of the other
comprehensive income
– Additional disclosures.
• Revised PSAK 24 will have an impact on the presentation of
reclassification and so companies should apply retrospectively using
the new method. According to PSAK 25 (accounting policies, changes
in accounting policies, estimates and correction of errors), the
companies should restate financial statements have been published .
9
Literature Review – research on accounting changes
• Investor focused on large, so companies tend to be
applying accounting policies early (Castello et al. 1994).
• Companies that have larger debts will perform faster
adoption of standards (Sami and Welsh, 1992) but
according Castello et al. (1994) actually found the opposite -
contracting theory
• Company audited by big four - (Trombley, 1989).
• Harahap (2010) found that the total assets, changes in ROE
and auditors have a positive influence on the early adoption
of accounting standards.
10
Literature Review – hyphotesis 1
• Investors generally invest focused on the companies that have
big capitalization.
• Financial statement including interim financial report are very
important information in the decision making for investors and
prospective investors.
• The company should pay more attention to information presented
in the interim financial statements if they have a big market
capitalization.
• H1: Companies with larger market capitalization have the
possibility in implementing PSAK 24 (2013) earlier
11
Literature Review – hyphotesis 2
• Companies with a large number of employees, tend to
spend more for employee expense and have more liability
related to employee benefit.
• PSAK 24 more relevant to companies that have more
employees.
• Companies with larger number of employees is expected
to be faster in applying PSAK 24 (2013) because the
standard is closely related to the company's obligation to
its employees and also government regulations relating to
the welfare of employees.
• H2: Companies with a larger number of employees
have possibility in implementing PSAK 24 (2013)
earlier.
12
Literature Review – hyphotesis 3
• To run its business activities the company needs funds from creditor.
• The companies that have high debt equity ratio should have more
accountability and transparency, because creditor need the information
to analyze the credit investment.
• The application of IAS 24 Revised 2013 influence to changes in the
value of liabilities and equity.
• Companies with a larger debt to equity is expected to be faster in
applying IAS 24 Revised, 2013. The companies wanted to disclose
impact of changes in accounting standard earlier to creditors.
• H3: Companies with a larger Debt to Equity Ratio (DER) have
possibility in implementing PSAK 24 (2013) earlier.
13
Literature Review – hyphotesis 4
• Harahap (2010) found that companies that have large changes
of return on equity (ROE) would adopted PSAK 24 earlier.
• PSAK 24 result significance change in equity because
unrealized gain or loss actuarial will present as part of equity. If
the company have unrealized actuarial losses, the total equity
will decrease.
• The company with the change of positive ROE (favorable) is
expected to be faster in applying PSAK 24 (2013).
• H4: Companies with a larger change in Return On Equity
(ROE) have possibility in implementing PSAK 24 (2013)
earlier.
14
Literature Review – hyphotesis 5
• Harahap (2010) also mentions that companies audited by public
accounting firms were great also faster in applying PSAK 24
(2013).
• Large public accounting firm will generally be offered to clients to
implement the new standards as soon as possible, due to
maintain its reputable and quality of services to client.
• Large public accounting firms have a better understand of new
accounting standards than small ones. Generally big four
accounting firm issue module and give a training of the new
standards
• The companies audited by big four accounting firms are expected
to be faster in implementing PSAK 24 (2013).
• H5: Companies audited by a public accountant's office "Big
4" have possibility in implementing PSAK 24 (2013) earlier.
15
Research Method
•
•
Descriptive analysis
This research uses regression model similar to the regression model
on research Harahap (2010) with modifications.
Adoption Timingi = α0 + α1CAPi + EMPLOYEEi + α3DERi +
α4ROECHANGEi + α5AUDITORi + εi
Adoption
Timing
: Dummy variable, the value 1 to companies that adopt PSAK
24 (2013) of the interim financial statements and the value 0
for companies that do not adopt in the interim financial report
2015
CAP
: The market capitalization value in 2015
EMPLOYEE
: The number of employees of the company in 2014
DER
: Debt to Equity Ratio 2014
ROECHANGE : Return On Equity change from 2013 to 2014
AUDITOR
: Dummy, value 1 to companies audited by audit firms "Big 4"
and the value 0 for companies that are not audited by audit
firms "Big 4"
16
Result and Discussion - Data
Criteria
Companies listed in the Indonesia Stock
Exchange until December 31, 2015
518
The company which is newly registered in 2015
13
Companies that do not submit the Financial
Statements 2014
Companies with incomplete data
Total Observations (Sample)
•
•
Amount of
Companies
15
3
487
The research use the listed companies in the Indonesia Stock
Exchange (IDX) until December 31, 2015.
Purposes sample with criteria:
• Listed from Jan, 1 2015 and 2014
• Have financial statement and interim report
17
Result and Analysis Variabel
N
Independent Variable:
CAP (Jutaan)
487
EMPLOYEE
487
DER
487
ROECHANGE
487
Variabel Dummy:
Variabel
N
Dependent Var - Adoption
Q1
487
Q2
487
Q3
487
Independent Variable:
AUDITOR
487
Mean
9.211.790
3.577,40
1,49
0,52
Standard
Deviation
35.842.644
10.287,56
5,22
66,14
Minimum
10.200
2
-64,71
0,01
Maximum
437.355.969
156.097,00
28,19
946,3
Sample Conditions
Amount
Percentage
Applied (1)
Not yet Applied (0)
Applied (1)
Not yet Applied (0)
Applied (1)
Not yet Applied (0)
72
415
115
372
194
293
14,80%
85,20%
23,60%
76,40%
39,60%
60,40%
Audited by BIG 4 (1)
Not Audited by BIG 4 (0)
191
296
39,20%
60,80%
18
Data and Analysis
Q1
Description
Q2
Q3
B
Sig
B
Sig
B
Sig
CAP
0,458
0,000**
0,452
0,000**
0,372
0,000**
EMPLOYEE
0,051
0,134
0,066
0,035**
0,054
0,083*
DER
-0,010
0,847
-0,030
0,534
-0,022
0,590
ROE
0,008
0,492
0,002
0,826
0,000
0,972
AUDITOR
0,393
0,183
0,060
0,812
0,275
0,202
Observation
Prob>Chi-Square
N R-sq
487
487
487
0
0
0
22,10%
23,00%
20,20%
19
Data and Analysis - sensitivity
Description
Q1
Q2
Q3
Coefficient
P value
Coefficient
P value
Coefficient
P value
EMPLOYEE
0,137
0,000**
0,152
0,000**
0,135
0,000**
DER
0,002
0,962
-0,016
0,718
-0,013
0,730
ROE
0,001
0,935
-0,003
0,712
-0,005
0,565
AUDITOR
0,716
0,011**
0,393
0,097*
0,537
0,008**
Observasi
Prob>Chi-Square
N R-sq
487
487
487
0
0
0
13,50%
13,10%
11,7
20,20%
20
Conclusion
Conclusion
There are many companies that have not applied PSAK 24 (2013) in interim
•
•
financial statements, even until the third quarter (Q3) 2015.
In Q1 there are 72 companies;
Q2 cumulatively there are 115 companies that have applied, while 372
companies have yet to implement.
In Q3 cumulatively There are 194 companies that have applied and 293
companies have not implemented.
Despite the increase of the company applying the PSAK 24 (2013) in an
interim financial report in 2013, but the company did not apply the amount
still greater.
Market capitalization and number of employees have significant effect on the
application of PSAK 24 (2013) in the interim financial statements of 2015.
The results of the sensitivity test showed that the auditor has significant
influence in the company's consideration to apply PSAK 24 (2013) in interim
financial statements.
21
Conclusion
Implication
•
Regulators should provide more oversight or, if necessary sanctions
for companies that do not implement the standard as appropriate.
•
The standard setters are expected to promote new standard to
financial statements prepare
Further Research
•
Analyze PSAK 24 on annual financial statement 2015
•
Impact the changes in the quality of financial statement
•
Value relevance of changes in PSAK 24
22
THANK YOU
23