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FINANCIAL REPORTING &

ANALYSIS
LAPORAN KEUANGAN
 Laporan keuangan perusahaan/komersial (WAJIB menurut
Standar Akuntansi Keuangan (SAK))
1. Laporan Posisi Keuangan / Neraca (Balance Sheet /
Statement of Financial Position)
2. Laporan Laba Rugi (Income Statement)
3. Laporan Perubahan Ekuitas (Statement of Changes in
Equity)
4. Laporan Arus Kas (Statement of Cash Flows)
5. Catatan Atas Laporan Keuangan (Notes to Financial
Statement)

 Laporan keuangan perusahaan/komersial (TIDAK WAJIB),

seperti F/S interim, laporan perkembangan ekonomi /
industri / perusahaan, laporan proforma, dll)
*) Untuk F/S interim harus memperhatikan efek
musiman (seasonality) dan penyesuaian pada akhir
periode (year-end adjustment) karena F/S umumnya
disusun untuk 1 periode akuntansi (1 tahun)
Faktor-faktor yang mempengaruhi penyusunan F/S
 Standar Akuntansi Keuangan (SAK) dan Internasional Financial
Reporting Standards (IFRS)
 Aturan pemerintah/regulator (peraturan menteri, Otoritas Jasa
Keuangan (OJK), & Pasar Modal/Bursa Efek)
 Kebijakan manajemen perusahaan (karena manajemen adalah
pihak yang bertanggung jawab untuk menyusun F/S secara
fair, akurat, menerapkan akuntansi untuk menggambarkan
aktivitas bisnis)
 Mekanisme monitoring & penegakan ketentuan
o Peran auditor eksternal (pemberi opini atas F/S perusahaan)
o Corporate governance (persetujuan F/S oleh dewan direksi,
peranan internal auditor, serta peranan komite audit untuk
mengawasi proses akuntansi, internal control, & internal
auditor)
o Ancaman tuntutan hukum (litigation) dari pihak internal
maupun eksternal perusahaan selaku pengguna F/S
(kreditor / lender, shareholder, serikat pekerja, karyawan,
dan konsumen)
 Conceptual
Conceptual Framework
FrameworkFor
ForFinancial
Financial Reporting
Reporting

Third Level:
First Level: Second Level: Recognition,
Conceptual
Basic Fundamental Measurement, &
Framework
Objective Concepts Disclosure
Concepts

Need Qualitative Basic

characteristics assumptions
Development
Basic principles
Overview Basic elements
Constraints
Summary of the
structure

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Conceptual Framework

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Conceptual Framework
 First Level

OBJECTIVE : Provide information about the reporting entity

that is useful to present and potential equity
investors, lenders, and other creditors in their
capacity as capital providers.

 Second Level

ELEMENTS
 Assets
 Liabilities
 Equity
 Income
 Expenses

QUALITATIVE CHARACTERISTICS
 Fundamental qualities
 Enhancing qualities
Conceptual Framework
 QUALITATIVE CHARACTERISTICS

 Fundamental qualities
 Relevance
 Predictive value
 Confirmatory value
 Faithful representation / reliability
 Completeness
 Neutrality
 Free from error

 Enhancing qualities
 Comparability
 Verifiability
 Timeliness
 Understandability
Second Level: Fundamental Concepts

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Conceptual Framework
 Third Level

ASSUMPTIONS
 Economic entity
 Going concern
 Monetary unit
 Periodicity
 Accrual Basis

PRINCIPLES
 Measurement
 Revenue recognition
 Expense recognition
 Full disclosure

CONSTRAINTS
 Cost (historical cost)
 Materiality
Problem informasi akuntansi
1. Relevance >< reliability (dalam rangka pengambilan
kepu-tusan ekonomis)
2. Principles of accounting
 Accrual basis (income) >< cash basis (cash flow) 
terkait pengakuan revenue & expense
 Historical cost >< fair value
 Materiality
 Conservatism (terkait waktu pengakuan gain & loss)
3. Limitations of financial statement information
 Timeliness (periodic disclosure, not real-time basis)
 Frequency (quarterly & annually)
 Forward looking (limited prospective information)
Accruals & Cash Flows
• Foundations of accrual accounting are revenue recognition &
expense matching

• Relation between accruals & cash flows (C/F):

 Free C/F = Operating C/F (-)/(+) cash investment &
divestment in operating assets
 Net C/F = Free C/F (+)/(-) financing C/F (including
investment & divestment in financing assets

• Short term accruals are yield current assets and current

liabilities (also called working capital accruals)
• Long term accruals are yield non-current assets and non-
current liabilities (arise mainly from capitalization)
*) Note: Analysis research suggests short term accruals are
more
useful in company valuation
Accruals & Cash Flows
• The conceptual superiority of accrual accounting over C/F
arises because the accrual-based income statement (and
balance sheet) is more relevant for measuring a company’s
present and future cash-generating capacity.
 Revenue recognition & expense matching yields an income
number superior to C/F for evaluating “financial
performance”
 Accrual accounting produces a balance sheet that more
accurately reflects the “financial condition” or level of
resources available to the company to generate future C/F
 Accrual income is a superior predictor of future C/F than are
current C/F because
(1) through revenue recognition, accrual income reflects
future C/F consequences
(2) Accrual accounting better aligns inflows & outflows over
time through the matching process (this means income
is more stable and dependable predictor of C/F)
Accrual & cash flow (myths)

 Since company value depends on future cash

flows, only current cash flows are relevant for
valuation
 All cash flows are value relevant
 All accrual accounting adjustments are value
irrelevant
 Cash flows cannot be manipulated
 All income is manipulated
 It is impossible to consistently manage income
upward in the long run
Accrual & cash flow (truths)

 Accrual accounting (income) is more relevant

than cash flow
 Cash flows are more reliable than accruals
 Accrual accounting numbers are subject to
accounting distortions
 Company value can be determined by using
accrual accounting numbers
THE CONCEPTS OF INCOME (Economic)
ECONOMIC INCOME :
• Measures changes in shareholders wealth
• Is cash flow during the period (realized cash flow) plus change in
present value of expected cash flow, typically represented by the
change in the market value of the business’s net assets (unrealized
holding gain / loss)
• Useful when the objective of analysis is determining the exact return
to the shareholder for the period
• Less useful for forecasting future earnings potential

PERMANENT / SUSTAINABLE / RECURRING INCOME :

• stable average income that a business is expected to earn over its
life, given the current state of its business conditions)

OPERATING INCOME :
• income that arises from a company’s operating activities
THE CONCEPTS OF INCOME (Accounting)

 ACCOUNTING / REPORTED INCOME is income based

on the concept of accrual accounting
 Main purpose is income measurement (revenue &
expense recognition)
 Reasons for difference with economic income:
 Alternative income concept
 Historical cost
 Transaction basis
 Conservatism
 Earnings management
 The implications are adjustment for permanent
income, economic income, and operating income
FAIR VALUE ACCOUNTING
 Asset & liabilities value are determined on the basis of
the fair values (typically market prices) on the
measurement date (i.e., approximately the date of F/S)

 Differences with historical cost

 Transaction (actual/past/historical) valuation ><
current valuation
 Historical cost valuation (costs incurred) >< market
based valuation (assumptions)
 Income is determined by matching cost against
revenues (historical cost model) >< income is
determined merely by the net change in fair value of
assets & liabilities (fair value model)

 Aspects
1) On the measurement date 4) Market-based
measurement
2) Hypothetical transaction 5) Exit prices
FAIR VALUE ACCOUNTING
Hierarchy of inputs
a) Level 1 : quoted prices in active markets that the
reporting entity has the ability to access at the
reporting date, for identical assets & liabilities. Prices
are not adjusted for the effects, if any, of the
reporting entity holding a large block relative to the
overall trading volume (referred to as “blockage
factor”)
b) Level 2 : directly or indirectly prices in active markets
for similar assets & liabilities, quoted price for
identical or similar items in markets that are not
active, inputs other than quoted , process (e.g.
interest rates, yield curves, credit risks, volatilities) or
“market corroborated inputs”
c) Level 3 : unobservable inputs that reflect
management own assumptions about the
assumptions market participants would make
FAIR VALUE ACCOUNTING
Valuation techniques
a) Market approach (fair value is measured by directly or
indirectly using prices from prices from actual market
transactions)
b) Income approach (fair value is measured by
discounting future C/F (or earnings) expectations to
the current period
c) Cost approach (fair value is determined as the current
cost to a market participant (buyer) to acquire or
construct a substitute asset that generate
comparable utility after adjusting for technological
improvements, natural wear and tear, and economic
obsolescence, or current replacement cost, or cost of
replacing an asset’s remaining service capacity)
FAIR VALUE ACCOUNTING
 Advantages:
 Reflects current information
 Consistent measurement criteria
 Comparability
 No conservative bias
 More useful for equity analysis
 Disadvantages
 Lower objectivity
 Susceptibility to manipulation (use of level 3
inputs)
 Lack of conservatism
 Excessive income volatility
 Implication for analysis
 Focus on balance sheet
 Restating income
 Analyzing use of input
 Analyzing financial liabilities
Accounting Analysis
Demand for accounting analysis:
• Adjust for accounting distortions so financial reports
better reflect economic reality
• Adjust general-purpose F/S to meet specific analysis
objectives of a particular user
Sources of accounting distortions:
• Accounting standards, attributed to (1) political
process of standard-setting, (2) accounting principles
and assumptions, (3) conservatism
• Estimation errors, attributed to estimation errors
inherent in accrual accounting
• Reliability >< relevance, attributed to over-
emphasis on reliability at the loss of relevance
• Earnings management, attributed to window-
dressing of F/S by managers to achieve personal
benefits
Accounting Analysis
Analysis objectives:
• Comparative analysis, demand for financial
comparisons across companies and/or across time
• Income measurement, demand for
a)equity wealth changes
b)measure of earnings power
because these corresponds to two alternative income
concepts
a) Economic income (or empirically economic profit)
b) Permanent income (or empirically sustainable
profit)
Accounting Analysis
EARNINGS MANAGEMENT (frequent source of
distortions)
 Strategies
1. increasing reported income with adjust
accruals
2. big bath (record huge write-offs in one period to
relieve other periods of expenses)
3. income smoothing (decrease or increase
reported income to reduce its volatility)
 Motivations
1. contracting incentives, adjust numbers used in
contract that affect their wealth (e.g.,
compensation contract)
2. stock price effects, adjust numbers to influence
stock prices for personal benefits (e.g., mergers,
option or stock offering)
3. other reasons, adjust numbers to impact labor
demands (com-bat labor union demands),
management changes (big bath effect), societal
Accounting Analysis
EARNINGS MANAGEMENT (frequent source of
distortions)
 Mechanism
1) income shifting (accelerate or delay recognition
of revenues or expenses to shift income from one
period to another)
2) classificatory earnings management
(selectively classify revenues and expenses in
certain parts of the income statement to affect
analysis inferences regarding the recurring nature
of these items)
 Analysis implications
 Checking incentives for earnings management
 Checking management reputation & history
 Checking consistent pattern
 Checking earnings management opportunities
Process of Accounting Analysis
Accounting analysis involves several inter-related
processes and tasks that can be grouped into two broad
areas
 Evaluating earnings quality
1) Identify and assess key accounting policies
2) Evaluate extent of accounting flexibility (changes
of accounting policies & estimates)
3) Determine the reporting strategy
4) Identify and assess “red flags” (items that alert
analyst to potentially more serious problems)
 Adjusting F/S
Identify, measure, and make necessary adjustments to
F/S to better serve one’s analysis objectives
Process of Accounting Analysis
RED FLAGS are …….
1. Poor financial performance-desperate companies are
prone to desperate means
2. Reported earnings consistently higher than operating
cash flows
3. Reported pretax earnings consistently higher than
taxable income
4. Qualified audit report
5. Auditor resignation or a non-routine auditor change
6. Unexplained or frequent changes in accounting
policies
7. Sudden increase in inventories in comparison to sales
8. Use of mechanisms to circumvent accounting rules,
such as operating lease and receivables securitization
9. Frequent one time charges & big baths
Auditing & F/S Analysis
 Auditing identifies errors and irregularities, which if
undetected would materially affect these statements‘
fairness of presentation or their conformity with
accounting standards

 Analysis implication related to audit process (audit

risk), auditing standards, auditor opinions, and
regulator

 Types of audit qualifications

1) ‘except for’ qualification / qualified
2) Adverse opinion
3) Disclaimer / no opinion
Auditing & F/S Analysis
Potential areas of vulnerability ……
 Growth industry/company with pressure to maintain a
high market price or pursue acquisitions
 Company in financial distress requiring financing
 Company with high market visibility issuing frequent
progress reports & earnings estimates
 Management dominated by one or more strong-willed
individuals
 Signs of personal financial difficulties by members of
management
 Deterioration in operating performance or profitability
 Management compensation or stock options
dependent on reported earnings
 Deterioration in liquidity or solvency
 Capital structure too complex for the company’s
operation or size
Earnings quality
Determinant of EARNINGS QUALITY are accounting
principles, account-ing applications (management
discretion & motivations), & business risk)
 Income statement items (R & D cost, advertising
expense)
 Balance sheet items (conservatism in reported asset,
provision, and liabilities)
 External factors:
a) Quality of foreign earnings (difficulties &
uncertainties in repatria-tion of funds, currency
fluctuations, political & social conditions, local
customs & regulations, flexibility in dismissing
personnel / outsourcing)
b) Regulations (regulatory environment confronting
public utility, stability & reliability of earnings
sources, international tensions & political events)
c) Changing price levels
Notes (disclosures) to F/S (CALK)
 Bertujuan untuk memberikan tambahan
penjelasan (info yang relevan, bersifat material,
menghasilkan komunikasi yang lebih baik dengan
bahasa yang umum/mudah dimengerti, tapi tidak
berlebihan (overload)) atas F/S kepada pengguna
F/S
 Terkait dengan prinsip FULL DISCLOSURE
 Alasan:
1. Kompleksitas lingkungan bisnis
2. Perlunya informasi yang tepat waktu (timely)
3. Akuntansi merupakan sarana kontrol dan monitoring
aktivitas (umumnya terkait dengan fenomena atas
adanya kompensasi bagi manajemen, pembiayaan
yang bersifat off-balance sheet, & transaksi dengan
pihak tertentu (related parties))
Notes (disclosures) to F/S (CALK)
 Mencakup (terutama):
1. Kebijakan akuntansi & perubahannya
2. Kontinjensi & komitmen
3. Metode pencatatan/penilaian persediaan
4. Property, plant, equipment
5. Klaim kreditor
6. Klaim pemegang saham
7. Jumlah saham beredar
8. Ukuran alternatif (fair value)
9. Deferred taxes, pensions, & leases

 Informasi suplemen (disyaratkan oleh IASB)

1. Pengungkapan atas perubahan harga
2. Info tentang cadangan migas
Notes (disclosures) to F/S (CALK)
 Media lain dalam pelaporan keuangan
1. Pernyataan manajemen
2. Surat pemberitahuan pada pemegang saham

 Informasi lainnya (yang berguna untuk pengambilan

keputusan tentang investasi, kredit, dan keputusan lain
yang sejenis)
1. Diskusi tentang kompetisi
2. Laporan analis
3. Statistik ekonomi
4. Artikel/berita tentang perusahaan
Disclosure Issues
 Related party transactions
1. The nature of related-party relationship
2. The amount of transactions and the amount of
outstanding balances, including commitments, the
nature of consideration, & details of any guarantees
given or received
3. Provisions for doubtful debts related to the amount
of outstand-ing balances
4. The expense recognized during the period in respect
of bad or doubtful debts due from related parties
 Accounting error (unintentional mistakes)
 Fraud / irregularities (misappropriation of assets &
fraudulent financial reporting)
Disclosure Issues
Subsequent events (events after the reporting period or post
balance sheet events)

1. Events that provide additional evidence about conditions THAT

EXISTED at the statement of financial position date, including the
estimates inherent in the process of preparing F/S  ADJUSTED
SUBSEQUENT EVENTS
a) Loss on A/R results from a customer’s bankruptcy subsequent
to the B/S date
b) Settlements of litigation

2. Events that provide additional evidence about conditions THAT

DID NOT EXISTED at the statement of financial position date, but
arise subsequent to that date  NON - ADJUSTED SUBSEQUENT
EVENTS
a) A major business combination after the reporting period or
disposing of a major subsidiary
b) …..
Disclosure Issues
 Subsequent events (events after the reporting period) ……
a) …….
b) Announcing a plan to discontinue an operation or
commencing the implementation of a major restructuring
c) Major purchases of assets, other disposals of assets, or
expropriation of major assets by government
d) The destruction of a major production plant or inventories
by a fire or natural disaster after the reporting period
e) Major ordinary share transactions and potential ordinary
share transactions after the reporting period
f) Abnormally large changes after the reporting period in
asset prices, foreign exchange rates, & taxes
g) Entering into significant commitments or contingent
liabilities, for example by issuing significant guarantees
after the statement date
Disclosure Issues
 Diversified (conglomerate) company (consolidated
information & individual segments information)
 This reporting will help users of F/S to
a) Better understand the enterprise’s performance
b) Better assess its prospects for future cash flows
c) Make more informed judgments about the
enterprise as a whole
 The IASB requires that an enterprise report the following:
a) General information about its operating segments
b) Segment profit & loss and related information
c) Segment assets & liabilities
d) Reconciliations
e) Information about products, services, & geographic
areas
f) Major customers
Disclosure Issues
 Interim reports
 IRFS requires companies to follow DISCRETE APPROACH, so …..
 the companies should treat each interim period as a separate
accounting period
 companies would follow the principles for deferrals &
accruals used for annual reports
 companies should report accounting transactions as they
occur, & expense recognition should not change with the
period of time covered
 companies should use the same accounting policies for
interim reports and for annual reports
 not INTEGRAL APPROACH, that says …..
 interim report is an integral part of the annual report & that
deferrals & accruals should take into consideration what will
happen for the entire year
 companies should assign estimated expenses to parts of the
year on the basis of sales volume or some other activity base
Disclosure Issues
 Interim disclosures
 Statement that the same accounting policies & methods of
computation are followed in the interim F/S as compared
with the most recent annual F/S or, if those policies or
methods have been changed, a description of the nature
and effect of the change
 Explanatory comments about the seasonality or cyclicality
of interim operations
 The nature and amount of items affecting assets, liabilities,
equity, net income, or cash flows that are unusual because
of their nature, size, or incidence
 The nature and amount of changes in accounting policies
and estimates of amounts previously reported
 Issuances, repurchases, & repayments of debt and equity
securities
 Dividends paid (aggregate or per share) separately for
ordinary shares and other shares
 Segment information
Disclosure Issues
 Interim disclosures ………
 Changes in contingent liabilities or contingent assets
since the end of the last annual reporting period
 Effect of changes in the composition of the company
during the interim period, such as business
combinations, obtaining or losing control of
subsidiaries and long term investments,
restructurings, and discontinued operations
 Other material events subsequent to the end of the
interim period that have not been reflected in F/S for
the interim period

 Unique problems of interim reporting

 Income taxes
 Seasonality
Disclosure Issues
 Current reporting issues
1. Financial projections & financial forecasts
2. Questions of liabilities
3. Internet financial reporting
4. Fraudulent financial reporting (intentional or reckless
conduct, whether act or omission, that results in
materially misleading F/S)
 The fraudulent financial reporting relates to
internal environments
a. Poor internal control systems
b. Management’s poor attitude toward ethics
c. Perhaps a company’s liquidity or profitability
 The fraudulent financial reporting relates to
external environments
a. Industry conditions
b. Overall business environment
c. Legal & regulatory considerations
Disclosure Issues
 The incentives for fraudulent financial reporting
a. Obtain a higher share price
b. Avoid default on a lone covenant
c. Make a personal gain of some type (additional
compensation, promotion)
 Because of the situational pressures on the company or
individual manager
a. Sudden decreases in revenue or market share
b. Unrealistic budget pressures
c. Financial pressure resulting from bonus plans
 Because of the opportunities
a. The absence of a board of directors or audit
committee
b. Weak or non-existent internal accounting controls
c. Unusual or complex transactions
d. Accounting estimates requiring significant
subjective judgment by company management
e. Ineffective internal audit staffs
Disclosure Issues
 Criteria for making accounting & reporting choices
 Ratio analysis
 Comparative analysis (presents same information for 2
or more different dates or periods)
 Percentage or common size analysis (horizontal analysis
or vertical analysis)
 Management’s reports (management commentary &
management’s responsibilities for F/S)
 Auditor’s report (opinion)
1. Unqualified opinion
2. Qualified, adverse, or disclaimer opinion (because of
the factors such as going concern, lack of
consistency, and emphasis of a matter)
Disclosure Issues
 First time adoption of accounting standard (IFRS)  adjustments are
generally recorded in Retained Earnings (R/E)
 Required exemptions (pengecualian wajib) from retrospective treat-
ment in first time adoption of IFRS
a) estimates
b) hedge accounting,
c) non-controlling interests
 Elective exemptions (pengecualian yang bisa dipilih) from
retrospect-ive treatment in first time adoption of IFRS
a) Share-based payment transactions
b) Fair value or revaluation as deemed cost
c) Leases
d) Employee benefits
e) Compound financial instruments
f) Fair value measurement of financial assets or financial liabilities
at initial recognition
g) Decommissioning (penonaktifan) liabilities included in the cost
of property, plant, & equipment
h) Borrowing cost
PELAPORAN KEUANGAN PEMERINTAH
(PP 71/2010 tentang Standar Akuntansi
Pemerintahan (SAP)

 Berperan dalam rangka (1) akuntabilitas, (2)

manajemen, (3) transpa-ransi, (4) keseimbangan antar
generasi, (5) evaluasi kinerja
 Tujuannya untuk penyajian informasi mengenai:
1. Sumber, alokasi, & penggunaan SD keuangan
2. Kecukupan penerimaan periode berjalan untuk
membiayai seluruh pengeluaran
3. Jumlah SD ekonomi yang digunakan dalam
kegiatan entitas pelaporan serta hasil yang telah
dicapai
4. Bagaimana entitas pelaporan mendanai seluruh
kegiatannya dan mencukupi kebutuhan kasnya
5. Posisi keuangan & kondisi entitas pelaporan terkait
dengan sumber penerimaannya, baik jangka
pendek maupun panjang, termasuk yang berasal
dari pungutan pajak & pinjaman
6. Perubahan posisi keuangan entitas pelaporan (naik
PELAPORAN KEUANGAN PEMERINTAH
(PP 71/2010 tentang Standar Akuntansi
Pemerintahan (SAP)

• Laporan keuangan (WAJIB)

1. Laporan Realisasi Anggaran (LRA)
2. Laporan Perubahan Saldo Anggaran Lebih
(SAL)
3. Neraca
4. Laporan Operasional (LO)
5. Laporan Arus Kas (LAK)
6. Laporan Perubahan Ekuitas (LPE)
7. Catatan Atas Laporan Keuangan (CALK)

• Disusun berdasarkan Kerangka Konseptual Akuntansi

Pemerintahan.
*) Perhatikan pula “Buletin Teknis” dan “Panduan
Teknis” Penyusunan
Laporan Keuangan (KSAP/Ditjen Perbendaharaan
PELAPORAN KEUANGAN PEMERINTAH
(PP 71/2010 tentang Standar Akuntansi
Pemerintahan (SAP)

• Asumsi dasar
1. Kemandirian entitas
2. Kesinambungan entitas
3. Keterukuran dalam satuan uang (monetary
measurement)

• Karakteristik kualitatif
1. Relevan
2. Andal
3. Dapat dibandingkan
4. Dapat dipahami
PELAPORAN KEUANGAN PEMERINTAH
(PP 71/2010 tentang Standar Akuntansi
Pemerintahan (SAP)

• Prinsip akuntansi & pelaporan keuangan

1. Basis akuntansi (akrual)
2. Prinsip nilai historis
3. Prinsip realisasi
4. Prinsip substansi mengungguli bentuk formal
5. Prinsip periodisitas
6. Prinsip konsistensi
7. Prinsip pengungkapan lengkap
8. Prinsip penyajian wajar

• Kendala informasi yang relevan & andal

1. Materialitas
2. Pertimbangan biaya & manfaat
3. Keseimbangan antar karakteristik kualitatif
Referensi :
Kieso, Donald E., Jerry J. Weygandt, and Terry D. Garfield, Intermediate
Accounting: IFRS edition, edisi 2, Wiley, 2014

Subramaniam, K R and John J. Wild, Financial Statement Analysis, edisi 10,

McGraw Hill – Irwin, 2009

Republik Indonesia, PP 71 tahun 2010 tentang Standar Akuntansi Pemerin-

tahan (SAP), cetakan pertama, Visimedia, Jakarta, 2011