Abstract

Indonesia, the largest economy in South East Asia, is one of the emerging economies currently engaged in the process of converging their national accounting standards with the International Accounting Standards (IAS) or the International Financial Reporting Standards (IFRS). Unlike the ‘big-bang’ adoption approach in the European Union member countries and Australia, IFRS adoption in Indonesia follows a gradual process in which some selected IFRS are adopted each year and published as the Indonesian equivalents of IAS/IFRS which are promulgated by the International Accounting Standards Board (IASB). Indonesia provides an interesting example of how IAS/IFRS are adopted in an emerging economy, as the country has a unique history in the development of national accounting structures and has experienced a rapid expansion in its financial systems.