The Implementation of Accounting Standards for Agriculture (Psak 69): The Analysis of Companies’ Readiness

Abstract

The objective of this research is to analyze the readiness of Accounting Standards for Agriculture (PSAK 69) that should be implemented for 2018 financial statements in Agro Industry Company in Jember and Probolinggo, Indonesia. Qualitative Method has been employed in this research with interview and observation in some agro industry companies. The objects of this research are PT Mangli Djaya Raya, PTPN X (Kertosari Garden), and Perum Perhutani KPH Jember and Probolinggo. The results indicate that those companies are not entirely implementing PSAK 69 and generally they employ historical cost to recognise and measure their biological assets. PT Mangli Djaya Raya, which has tobacco plants, reports its financial statements once a year, while the lifetime of tobacco plants last less than a period of financial statements. Therefore, the tobacco plants doesn‟t appear in their balance sheet as biological assets. The results in PTPN X, which has tobacco, cacao, and sugarcane, imply that the biological assets recognition based on historical cost rather than fair value. However, for cacao and sugarcane have already been recognized as biological assets in its balance sheets. Similar results for Perum Perhutani KPH Jember and Probolinggo, which have teak, rosewood, and mahogany as their commodity, do not recognize biological assets based on fair value. Generally, the obstacle of PSAK 69 implementation is how to measure biological assets using fair value due to lack of active market. This may affect reliability and relevancy of companies financial statements information regarding biological assets.