Many family-owned and large corporate business groups in Indonesia carry out internal restructurings — merging, splitting, or transferring subsidiaries that remain under the same controlling owner. Such transactions are called business combinations under common control, and have long had a different accounting treatment than ordinary business acquisitions. The rule has just been updated: on October 29, 2025, DSAK IAI ratified the revised PSAK 338: Business Combinations Under Common Control, following a post-implementation review conducted throughout 2024. This revision took effect January 1, 2026, with early application permitted.
Why are commonly-controlled entities treated differently?
In an ordinary business combination (governed by PSAK 22), the buyer acquires a business from an independent party — so the transaction is recorded using the acquisition method: acquired assets and liabilities are remeasured at fair value, with the difference recognized as goodwill.
But when a transaction occurs between entities that were already under the same controlling owner from the start — for instance, PT A and PT B both owned by the same family or the same parent company, then merged — there's no genuine change in economic substance. What changes is only the legal structure of the business group, not who actually controls the underlying assets. Because of this, PSAK 338 sets out a separate accounting treatment for such combinations — essentially recorded at the carrying value (predecessor value) of the combining entities, rather than remeasured to fair value as in an ordinary acquisition.
What's new in the 2025 revision
The PSAK 338 revision follows up on a post-implementation review involving stakeholders throughout 2024 — a process DSAK IAI regularly conducts to assess whether a standard already in effect remains relevant to field practice. DSAK IAI has stated that the final revision's provisions do not differ substantially from the exposure draft previously published for public consultation in August 2025.
Who should pay attention to this revision
- Family business groups currently undertaking or planning subsidiary consolidation, business unit spin-offs, or ownership reorganization among entities within the same group.
- Corporations with numerous subsidiaries carrying out internal restructuring for operational efficiency or preparation ahead of an IPO.
- Accountants and auditors preparing or reviewing consolidated financial statements for business groups, particularly in determining whether a transaction qualifies as an ordinary business combination (PSAK 22) or a common-control combination (PSAK 338).
Practical steps for business group owners
- Identify control status before the transaction. The first step is always confirming whether the entities involved were genuinely under the same controlling owner before and after the transaction — this determines which accounting standard applies.
- Prepare clear ownership structure documentation, including a history of control prior to the restructuring, as this forms the basis for determining the recording method.
- Align with tax implications. Restructurings involving asset transfers between commonly-controlled entities carry their own tax consequences (including the book value vs. market value question) that need to be planned alongside the accounting treatment — not as two separate processes.
- Evaluate the impact on consolidated financial statements, especially if your business group is also transitioning to SAK EP, since the two standards are interconnected in determining how combined financial statements are presented.
Business group restructuring is often seen as "just administration" since it doesn't involve outside parties. In reality, its accounting and tax treatment can significantly affect the group's future financial statements and tax obligations. Involving a consultant from the planning stage — rather than after the transaction has gone through — is usually far cheaper in cost and risk.
Disclaimer: This article was prepared as general information as of July 6, 2026 and does not constitute tax advice for any specific case. Tax regulations are subject to change. For guidance on your specific business situation, please consult the Sentary Consulting team or a registered tax consultant.