Revised PSAK 338 on Business Combinations Under Common Control
The Indonesian standard setter approved the revision of PSAK 338 on 29 October 2025, effective 1 January 2026. Investment entities are excluded, with new definitions and rules on pre-combination information.
Key points
- The revision clarifies the pooling of interests method and disposal in equity.
The Financial Accounting Standards Board of the Institute of Indonesia Chartered Accountants approved the revision of PSAK 338 Business Combinations Under Common Control on 29 October 2025. PSAK 338 (2025) took effect on 1 January 2026, with early application allowed.
The revision follows a post-implementation review, through a discussion paper and focus group discussions from May to December 2024 with regulators, public accountants and businesses. Its aim is to clarify the scope and application of the pooling of interests method and disposal in equity.
Four main changes
First, investment entities are excluded from the scope of PSAK 338.
Second, the standard adds definitions of transferred business, receiving entity and transferring entity.
Third, there is a new reference on the carrying amount of the transferred business used in the pooling of interests method.
Fourth, the standard covers presentation of pre-combination information when applying the pooling of interests method is impracticable. Related disclosures are also adjusted.
A group planning a merger or transfer of subsidiaries among entities under common control from 2026 should reread its accounting policy against the text of PSAK 338 (2025), especially the source of the transferred business’s carrying amount.
Tax conditions for mergers are covered in Book Value Conditions for Mergers Under PMK 1/2026.