Comparison Facts

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in net assets should articulate to the net assets or equity reported in the statement of financial position.

(f) Statement of Cash Flows

The primary purpose of a statement of cash flows is to provide relevant information about the cash receipts and cash payments of an organization during a period. Statement 95 discusses how that information helps investors, creditors, and others and establishes standards for the information to be provided in a statement of cash flows of a business enterprise.

(g) Effective date and transition

(h) Appendix A: Background Information (i) Appendix B: Basis for Conclusion (j) Appendix C: Illustrative Examples (k) Appendix D: Glossary

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From PSAK 45 point of views, besides referring facts above, there are several non-referring parts. The first non-referring part is paragraph 2 of PSAK 45. It has been stated that the statement may be applied to governmental organizations and same kind of units, as long as it does not against the law. In contrast, SFAS 117 is not used by government agencies in the USA. In paragraph 28 of SFAS 117, government agencies are part of soliciting contribution involvement to support NPOs activities. In additional, in paragraph 47 of SFAS 117, some respondents suggested to the board that to make possibilities for certain NPOs in the USA, such as universities and hospitals, to report in ways that are comparable to similar profit organizations or governmental entities. In other words, government agencies have their own standards for financial reporting.

Table 3.2 Referred facts of PSAK 45 to American Accounting Standards

Part of PSAK 45 Statement Reference Remark

Introduction

1. The objective of the statement (p.45.2, lines 25–28)

SFAS 117, par. 1 Translation

2. Scope (par. 01) SFAC No. 4, par. 6 Translation

3. Definition

• Permanent restriction (p.45.3, lines 33–38)

• Temporary restriction (p.45.4, lines 1–6)

• Restricted resource (p.45.4, lines 8-11)

SFAS 117, p. 67 SFAS 117, p. 68 SFAS 117, p. 66 (Donor-imposed restriction)

Translation Translation Same idea, different term Financial Statements of Non-profit Entities

4. The purpose (par. 06 - 07) SFAS 117, par. 4 Translation 5. The purpose in detail (par. 08) SFAS 117, par. 5 Translation Statement of Financial Position

6. The purpose (par. 10) SFAS 117, par. 9 Translation

7. Classification of Assets and Liabilities (pars. 12-13)

SFAS 117, pars. 11 – 12 Translation

8. Classification of Net Assets as Donor Restricted or Unrestricted (pars. 14-18)

SFAS 117, pars. 13 – 16 Translation

52 Statement of Activities

9. The purpose (par. 19) SFAS 117, par. 17 Translation

10. Changes in Classes of Net Assets (pars.

21–22)

SFAS 117, par. 19 Translation

11. Classification of Revenues, Expenses, Gains, and Loses

• Par. 23

• Par. 24 (Term: Resource)

• Pars. 25-26

SFAS 117, par. 20, the first and the last sentences SFAS 117, par. 21 (Term:

Contribution)

SFAS 117, pars. 22 - 23

Translation

Same idea, different term Translation 12. Information about Service Efforts (pars.

29–32)

SFAS 117, pars. 26 – 28 Translation, paraphrasing Statement of Cash Flows

13. The purpose (par. 33) SFAS 117, par. 29 Translation

Appendixes

14. Statement of Financial Position (p.45. 13) SFAS 117, p. 49 Translation of accounts’ names, same order, different amount of value

15. Statement of Activities (p.45.15–45.21) SFAS 117, p. 51 – 55 16. Statement of Cash Flows (p.45.22–45.25) SFAS 117, p. 55 – 58 17. Notes to Financial Statements (p.45.26–

45.30)

SFAS 117, p. 58 –62

Source: Processed data, IAI, 2011; FASB, 1993; FASB, 2008

Paragraph 4 of PSAK 45 is the second part. The statement recommends that unexplained regulations may refer to SAK (Indonesian GAAP) or SAK-ETAP/SAK-Entitas Tanpa Akuntabilitas Publik (Indonesian GAAP for Non-Publicly-Accountable Entities). SAK-ETAP facilitates Non-Publicly-Accountable Entities, which are entities who do not have significant public accountability, to produce general purpose financial statements for external users. External users are owners who are not directly involved to run the organizations, creditor, and credit rating agencies. SAK-ETAP has a purpose to achieve flexibility and assist Non-Publicly-Accountable

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Entities to get banking financial access. The statement is independent and does not refer to SAK/Indonesian GAAP.

The last one is a classification of cash inflows and outflows. Statement of Cash Flows refers to either PSAK 2 about Statement of Cash Flows or chapter 7 of SAK-ETAP, with additional information, among others are (a) Cash inflows from restricted resource must be used for long – term purposes; (b) Cash inflows from contributions and investment are restricted for the purpose of acquiring, constructing, and fixed asset maintenance, or for increasing endowment funds; (c) Interest and dividends are restricted for long-term purposes; and (d) Information disclosure about non-cash investment and financing, such as obtaining a building or investment asset by receiving a gift.

On the other hand, there are several parts that PSAK 45 does not refer to SFAS 117. The first thing is the statement establishmentbackground. It has been stated that the statement is part of a project that has been considering two things: (a) facts that NPOs provide financial statements that differ in their form and content, and (b) other inconsistent practices of NPOs, including accounting and reporting principles and practices that are incorporated in several of Audit Guides of the American Institute of Certified Public Accountants (AICPA). The statement has got through a very long process and involved many academicians, specialized accounting agencies, and respondents to reach the statement conclusion.

The second fact is the statement has several related statements, such as SFAC number 4 and SFAS 116. SFAC number 4 explains what NPOs are and what characteristics NPOs have to define the organizations. The concept, moreover, identifies that differences between NPOs and profit organizations arise principally in the ways they obtain resources. Therefore, the concept sets different objectives of financial reporting by NPOs. Thus, the detail of financial reporting by NPOs is thoroughly explained in SFAS 117. Along with SFAC number 4, SFAS 116 establishes accounting standards for contributions to all entities that receive or make contributions. The statement, hence, requires NPOs to differentiate between contributions received that increase permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets.

Three kinds of net assets influence financial statements reporting which is given details in SFAS 117.

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The glossary is the last issue that PSAK 45 does not refer to SFAS 117. PSAK 45 does not have a glossary. This is important since it gives a definition of repeated-used terminologies in the statement. Definitions help both financial statements users and makers to understand the context of the term in the financial statement. It is supposed to lead them to have same points of view and to reduce misunderstanding and misinterpretation of financial statements.